Seniors' crisis looms as Flaherty nixes more CPP, pushes private pensions
Outrage mounts as government rejects calls and proposals from labour and provincial finance ministers.
by Straight Goods News staff
The Harper government has rejected calls from provincial finance ministers and organized labour to expand the Canada Pension Plan. Instead, Finance Minister Jim Flaherty has proposed paying private companies to run a kind of mutual fund for workers with no guaranteed returns — the Pooled Registered Pension Plan (PRPP).
With millions of Baby Boomers facing an insecure retirement future, provincial premiers and unions had been pressing the government for action. The Canadian Labour Congress, for instance, had proposed a plan with staged premium increases that would have resulted in an eventual doubling of benefits and no new costs to taxpayers.
Flaherty's proposal is in line with attempts by Republicans over the last decade to privatize Social Security.
In Whitby, union activists took part in a spontaneous but short-lived occupation of Flaherty's constituency office as they were stunned by Flaherty's last-minute betrayal of Canadians' retirement security. In a December 17, 2010 press release, Ontario Federation of Labour President Sid Ryan said of the financial industry: "If it was capable of delivering secure pensions to Canadians, it would have done so 50 years ago."
In an interview with the Toronto Star, Ryan said that because "neither employers nor workers would be required to pay into the PRPP, it would not deliver income security for Canadians the way an expansion of the CPP would."
In a second press release later that day, Ryan said that "any plan that enables banks and insurance companies to cash in on the backs of working people is a huge betrayal." The press releases promises further action from the Ontario Federation of Labour.
Meanwhile, in a December 16th press release, Canadian Labour Congress President Ken Georgetti was astonished and disappointed with Flaherty's remarks since "there is overwhelming evidence that the private sector, voluntary system of saving for retirement has failed us for over 40 years and won't work now."
In a December 17th press release, Georgetti called on provincial finance ministers to continue their support of improving the CPP at their meeting with Mr. Flaherty in Kananaskis, AB: "They should give a Christmas gift to Canadians and give Mr. Flaherty a lump of coal."
Following that meeting, which took place December 18th to 20th, Georgetti said in a December 20th press release: "We have a looming pension crisis and we can't wait for years to fix this problem. An improved CPP is easily the best way to guarantee retirement security for Canadians." According to the Canadian Labour Congress, at least six of the provincial finance ministers at the meeting preferred to pursue an enhanced CPP.
While Flaherty may receive lumps of coal for Christmas for his change of heart regarding the CPP, his decision was certainly "a Christmas present to Corporate Canada," says Communications, Energy and Paperworkers Union of Canada (CEPUC) President Dave Coles in a December 17th press release.
Coles argues that Canadians "need economic security and the CPP has proven time and time again that it is the most efficient way to provide it to all Canadians."
Links and sources
Consensus growing to enhance the Canada Pension Plan
Occupation underway — Flaherty betrays Canada
Backlash grows against Flaherty's pension proposal
Betrayal on retirement security prompts first action
Georgetti criticizes Flaherty announcement on pension reform: Says CPP remains far better option than private plans
Georgetti calls on finance ministers to oppose Flaherty on pensions: Says Flaherty playing Santa to banks, Grinch to Canadians
Georgetti urges quick action on enhancing CPP: Says Canadians losing opportunities to save for retirement
Flaherty's private pension scheme "a Christmas present to Corporate Canada"
Posted: December 20, 2010
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