Context

The economic crisis has highlighted the serious deficiencies of the retirement savings system in Canada. The private elements of the system—company retirement plans, RRSPs and private savings—have suffered from the collapse of financial markets. The public elements of the system are a public trust—Old Age Security, Guaranteed Income Supplement (GIS), the Canada Pension Plan and Quebec Pension Plan (CPP/QPP). Yet Canadians wishing to protect their savings cannot under the current rules fully benefit from the security and savings offered by public pension plans.

Given the collapse of employer and private savings pensions plans, the Harper government is calling on Canadians to save more by investing in the same market that has just failed them so seriously. This is bad advice.

NDP Recommendation 1:

Eliminating seniors’ poverty by increasing the income-tested Guaranteed Income Supplement GIS by $700 million a year. Since the majority of poor seniors are women, this is also the equitable thing to do.

NDP Recommendation 2:

Working with the provinces to phase-in a doubling of CPP/QPP benefits (from about $11,000 per year to almost $22,000 per year, thus giving Canadians the chance to save in the least expensive, most secure, inflation-proof, retirement savings vehicle. Cost? An additional 2.5% of wages (matched by employers)—less than you pay for private savings vehicles (money you never see again).

NDP Recommendation 3:

Security for workplace pension plans through (a) a mandatory national pension insurance plan, paid for by pension plan sponsors and guaranteeing pension pay-outs of up to $2,500 per month in case of plan failure, and (b) a national facility, managed (with provincial agreement) by the CPP Investment Board, to adopt pension plans of failed companies and continue them on a going-concern basis to take advantage of market conditions and maximize pay-outs.

NDP Recommendation 4:

Amending Canada’s bankruptcy laws to ensure unfunded pension liabilities (money companies promised, but failed to contribute, to workplace pension plans) are given the same status as unpaid wages and go to the front of the line of creditors for payment. NDP MP John Rafferty’s (Thunder Bay-Rainy River) Bill C-501 is about to go to committee and the NDP calls on all parties to support it throughout the legislative process until such time as it becomes law.

NDP Recommendation 5:

A public National Pensions Summit, with representation from all interested parties—Federal/Provincial/Territorial governments, employers, workers, pensioners and experts to consider these and other proposals for addressing the national pensions crisis.