Sunday, December 15, 2013

Pension Reform

More of the white stuff has fallen, and I can ignore the importunate call of the snow shovel no longer, so I will make this brief with two reading recommendations for your Sunday morning discernment.

In today's Star, Martin Regg Cohn writes convincingly on the need for real pension reform, but he predicts that the provinces' finance ministers, who will be meeting today and tomorrow, will get nothing from federal Finance Minister Jim Flaherty. The latter will trot out the standard 'now is not the time- the economy is too fragile' line, but with more and more people destined to retire in relative poverty, the time for delay is over.

The fragility-of-the-economy-argument is given short shrift in another Star article by C. Scott Clark, a former Federal Deputy Minister of Finance, and Peter Devries, who was Director of Fiscal Policy when CPP was last reformed in 1998. The writers show how that tired argument has been used repeatedly to try to stop past measures:

The last significant structural changes to the CPP (and Quebec Pension Plan) were made in the late 1990s. At that time, CPP contribution rates were doubled, an independent investment board was established and the program was put on a sustainable basis. The arguments now being used by the government are not unlike those made by anti-reformers in 1997. Opponents argued that doubling the CPP premium rates would have a major negative impact on economic growth and job creation. This did not happen.

They go on to cite how the the economy was deemed too fragile when the government replaced the federal manufacturer's sales tax with the GST in 1991, and when the mid-90s saw the Liberals impose tough fiscal measures to deal with the deficit. In neither case did the economic sky fall in.

I'm convinced that we Canadians are far too passive, giving free reign to a government that makes its lack of responsiveness to the needs of Canadians a virtue. Until that changes, all we can likely expect is more of the same blather and inaction on the part of the Harper cabal.

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