CAW Local 200 Retired Workers Chapter

Published on February 11, 2012
Lana Payne

Has Stephen Harper’s ideology finally won out over self- preservation?

On the surface, it would appear so when you consider the firestorm he sparked with the announcement, in another country, that his government intends to overhaul Canada’s Old Age Security (OAS) program, one of the pillars in the country’s pension system.

The Conservative spin is that we can’t afford OAS because of the millions of baby boomers set to retire. Currently, about 4.9 million Canadians collect OAS benefits. By 2030 that number is expected to reach nine million before starting to decline again.

So, yes, the costs of OAS will go up, but are the benefits unsustainable or is Mr. Harper misleading Canadians with big numbers that, in and of themselves, don’t mean a lot?

Government actuarial reports say OAS is indeed sustainable, contradicting the position being put forward by the government. Facts once again get in the way of a “conservative message box.”

The total cost of OAS is projected to increase to 3.2 per cent of GDP from 2.4 per cent of GDP today. As some economists have pointed out, a less than one per cent increase in GDP is a small price to pay to maintain a basic retirement income for all Canadians, especially those with low incomes. And it is those seniors who will be hurt the most by changes to OAS.

So Stephen Harper’s musings in Davos, Switzerland two weeks ago that we must act to make OAS sustainable was a load of misleading baloney.

The question is why, as a Conservative pundit pointed out during a Twitter exchange, would Mr. Harper do something that would alienate his voting demographic? The Conservative pundit was referring to the over-55-year-olds who, in larger numbers, tend to support the Conservatives.

My reply was that Harper’s plan for OAS was unlikely to include changes that would hurt today’s seniors, but rather cheat the next generation, forcing them to work longer so he can finance his priorities: things like fighter jets and $13 billion a year in reckless corporate tax cuts.

Either that or like a couple times in the past, Mr. Harper has lost all sense of self-preservation and has allowed ideology to rule. After all, this is the same prime minister who proclaimed that there was no such thing as a good tax. Good taxes pay for OAS and ensure seniors in our country do not fall into abject poverty.

Actually, I think it is a bit of both: Harper will make changes that impact younger workers and ideology is now overruling political self-preservation.

What he didn’t count on, a rare political mistake for strategically ruthless Mr. Harper, was the pushback.

Angry seniors are calling and emailing Conservative MPs.

People close to retirement, who have 10 years or less left to work, are wondering if they will now need to work longer in order to qualify for OAS.

The baby boomers are worried. Young workers don’t vote for Mr. Harper and so he could care less about them.

But the prime minister’s OAS musings are an absolute gift to his political opposition, reinforcing the belief the majority of Canadians already have of this prime minister. They just don’t trust him with their Canada.

Mr. Harper and his minister of exaggeration Peter Van Loan, who outrageously compared Canada to Greece, have refused to deal in facts.

They have refused to recognize that the real problem with Canada’s retirement security system is not OAS or the peanuts that are paid to the poorest Canadians in the Guaranteed Income Supplement.

The problem is the Canada Pension Plan’s income replacement rate is much too low at 25 per cent and should be increased to 50 per cent in order to ensure some level of retirement security for the majority of Canadians.

The problem is that the supposed third pillar of Canada’s retirement system – workplace pension plans or private savings – is not much of a pillar.

Employers have not done their part.

Nearly 13 million Canadians have no workplace pension. Only about one-third of Canadians contribute to RRSPs. Most of those RRSPs are purchased by the top 20 per cent of income earners.

There is no doubt that Canada’s pension system needs reforming, but Mr. Harper has the wrong medicine. If our prime minister was interested in “retirement security,” he would move to enhance CPP instead of letting employers off the hook while handing them billions in tax breaks.

But that appears unlikely to happen under this prime minister, who is bent on using his majority to transform Canada into a fend- for-yourself nation.

Fortunately, I have more faith in the people of Canada than he does.

This time, Mr. Harper may find that he has gone one step too far. But will he blink?

Lana Payne is president of the Newfoundland and Labrador Federation of Labour. She can be reached by email at lanapayne@nl.rogers.com. Her column returns Feb.25.

Source: The Telegram

Filed under: In the News, Opinions/Submissions, pensions