Newspaper article The Canadian Press

Editorial Exchange: A Better Way to Improve Pensions

Newspaper article The Canadian Press

Editorial Exchange: A Better Way to Improve Pensions

Article excerpt

Editorial Exchange: A better way to improve pensions

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An editorial from the Winnipeg Free Press, published Jan. 20:

Manitoba NDP leadership candidate Theresa Oswald has jumped on Ontario Premier Kathleen Wynne's pension bandwagon, arguing a provincial pension is needed to keep people from poverty in their old age. That, however, is an expensive option to the better idea: Improving the Canada Pension Plan by hiking contributions from employees and employers. All premiers should continue to press Ottawa to do just that.

The problem is, Prime Minister Stephen Harper isn't listening.

Discussions on improving the CPP began years ago, but the prime minister has insisted the timing isn't right -- the global recession made for a tough time to hike costs on the business sector and the Harper government, citing economic uncertainty, still refuses to budge.

This ignores the interests of a majority of working Canadians, who do not have private pension plans. Statistics show people are not squirreling away enough money for retirement. Two-thirds of working Canadians do not have a company pension plan and RRSPs are the purview of upper income families.

Some provinces are becoming frustrated with the federal government's lack of response on the topic and are thinking of going it alone. Last year, Ontario Premier Kathleen Wynne introduced a bill to launch the Ontario Retirement Pension Plan, a mandatory investment plan that will see workers and employers each contribute 1.9 per cent of income into the fund.

Manitoba has stood alongside the provinces in vigorously calling for improvements to the CPP, which allows contributions up to a maximum income of $53,600. The maximum CPP benefit is $12,500 annually, but the average draw is $6,800. The CPP is a welcome supplement for those who have healthy work pensions, or have socked away private retirement savings, but that describes relatively few Canadians.

Provincial plans are not the answer. They won't allow residents to transfer their pension investments to another province, and that can limit career moves or cut the potential benefit of the investment. …

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