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CLC offers advise in advance of provincial premiers' ministers meeting in December.

by SGNews staff

OTTAWA , November 19, 2012 — With provincial premiers and finance mininsters set to meet next month to discuss the future of Canada's public pension system, the Canadian Labour Congress convened a panel of experts in support of its plan to expand CPP and increase benefits and keep the fund solvent.

The former Chief Actuary of CPP, Bernard Dussault, joined pension consultant Keith Horner and University of Ottawa Research Chair Michael Wolfson agreed there are several potential options for expanding CPP. All agreed, too, that CPP expansion is viable and affordable, as well as being critical to ensuring seniors don't fall into povety.

Bernard Dussault, Keith Horner and Michael Wolfson discuss options for CPP expansion, introduced by Ken Georgetti of the Canadian Labour Congress.

SGNews volunteer Susan Huebert transcribed an excerpt of their discussion, as posted to YouTube:

Ken Georgetti, President, Canadian Labour Congress:
In 2008, when the financial crisis exposed deep cracks in Canada’s patchwork system of pensions, the Canadian Labour Congress made a bold proposal — expand the Canada Pension Plan. It actually wasn’t so bold, I should say, or so new.

We had a policy on our books for many years to expand the CPP, but over the course of 2008 and 2009, we fully developed and costed out a detailed plan on how it could happen — how we could gradually improve the CPP on a go-forward basis so that future retirees would see improvements and improved CPP benefits. In fact, over a generation, our plan would insure that today’s young people had a good base pension that they could rely on, especially if they didn’t have the good fortune to work in a unionized workplace with a workplace pension plan.

We began a campaign and took it to the politicians federally, provincially, and municipally. It took a long time, but slowly and surely public opinion, media, and politicians began to believe that the time had come to seriously fix the looming problem of the vast majority of people that are not going to have enough retirement income after a lifetime of work. But in July of this year the provincial premiers actually instructed their finance ministers to examine options for a modest expansion of the Canada and Quebec pension plans.

The finance ministers, as you know, will be meeting right here in Ottawa next month, and this will be on their agenda. So tonight, we’re going to explore some of the options to expand the CPP with an esteemed panel of experts and a great moderator to keep them on track.

Bernard Dussault, former Chief Actuary of CPP:
In fact, I think poverty is the issue at stake here because I think the reason we have pensions is to avoid poverty in retirement. In Canada — even if Canada ranks fourth in the world for its pension system — we still have 35 percent of people over age 65 who have to rely on the GIS. GIS is for people who have less than $16,000 a year. That’s what we determine as being the poverty level. It’s definitely not exaggerated, because who would want to live at this level? It’s not possible to live with dignity with just $16,000.

So, because of the existence of the CPP, the take-up rate of the GIS since 1973 has come down from about 56 percent to 35 percent, but now that the CPP and the QPP have reached their maturity, the 35 percent take-up rate of the GIS is not expected to reduce. So, just in a nutshell, that’s the main reason why we are talking about expanding the CPP.

And why would this be the only way to reduce poverty? It’s obvious. If you don’t force people to save, they will not save. Some people do save. A lot of people buy RRSPs, but most of them withdraw them before they get into retirement for a lot of good financial reasons.

Fortunately, this point has been well understood by those who have to decide about what to do with poverty in seniors’ ages in Canada. In June 2010, the ministers of finance in Canada have reached an agreement in principle for a modest increase — expansion of the CPP. So, "modest" has not been defined, so we were wondering, "What would it be?" Just going from 25 to 35 to 40 — the CLC think it should be at least 50 percent — and 50 percent is not exaggerated. The maximum earnings on which the CPP applies is $50,000. So if the increase was just 40 percent, 40 percent of 50,000, that’s 20,000, but that’s the maximum. Fifty percent of 50,000, that’s 25,000, but not everyone’s at maximum. The average CPP is about half of the maximum, so expanding the CPP from 25 to 50 percent, I consider that to be modest, and this would cost six percent of covered earnings — three percent employers, three percent employees.

So, some economists have argued that if you increase the contribution rates, some see that as a tax that could affect the economy. It could. But the CPP was reformed in 1998, and from 1996 to 2003, the CPP contribution rate was raised gradually from 6 percent to 9.9 percent — that’s about a four percent increase — and the economy went very well in those years. I’m not saying that if we were to expand the CPP and charge an extra six percent the economy would go well or bad. We don’t know, but we can see that just increasing the CPP per se would affect the economy.

When you would increase the CPP, all the money would be invested, because by virtue of some recent CPP amendments, any expansion must be fully funded. Fully funded means that all the money must be put ahead of time. It must be invested. Investing a big amount of money is good for the economy. So that’s the main message I had for you tonight. It’s not — there’s no case for increasing the GIS to combat or alleviate further poverty. The GIS is a good program. I like to compare it to what could be called a Robin Hood approach, but there’s enough of Robin Hood.

We have to listen to Confucius, who said, "If people are hungry, rather than giving them fish, teach them how to fish." So this is what CPP expects of them.

Answer to a question: The US is not on the agenda tonight, but again I will cheat and speak about something that’s not on the agenda because the question has been legitimately raised.

When the announcement [was] made some months ago this year by the prime minister of Europe that the eligibility age for OAS benefits would be raised to 67, I was shocked, because the OAS needs to be revised, but not in that manner. There’s a big problem with the OAS,that it gives money to seniors just based on a residency test. It’s not based on a need; it’s not based on a right. So the OAS badly needs to be changed by — in fact, totally remove it and replace it or at the same time revamping the GIS, because the GIS is doing a good job, but it’s — the poverty level could be increased from 16,000 to about 20,000.

Michael Wolfson, Research Chair, University of Ottawa:
When my first exposure to this whole issue in the late '70s with the Lazare task force on retirement income policy, the United States had already legislated an increase in the age of entitlement from 65 to 67, but it wasn’t going to start for another 20 years, and it would be spread out over 20 years. So at that point, that report, if you go back and dig it out, said Canada should think about the same thing because we projected exactly the kinds of changes in the age structure — the demographers are pretty good — that we’re actually seeing, so this shouldn’t be a surprise to anybody.

The second example is in the Parliamentary committee in ’83, you know, there was discussion about, "What do we do about the fact that the population is aging, life expectancy is increasing?" and one of the proposals, quite specifically, in the chapter on intergenerational fairness is that the indexing of pensions should be tied, not only to the CPIX, it should be wage indexed, but also when the unemployment rate is high and life expectancy is growing faster than expected, pensions should not grow as much and vice versa.

And then we have in the 1990s, Sweden went through a major reform of its pension system, and among other things, the amount of pension that you draw from the public pension, the state pension, at the time you start drawing, turn 65 or whatever, is a function of life expectancy in the country at that time.

So there already are examples — you know,there are three of them — of different ways of thinking about this issue. Another one just to throw out, which I confess I haven’t analyzed or simulated, would be to say, well, instead of expanding CPP in the way that Keith and I have described, say, "Well, right now if you defer starting your pension after 65, it gets bigger and bigger, but the latest you can defer it is age 70, what if we just say, well, we’ll just raise it to 75 because it just keeps getting bigger and bigger, because one or both of you was mentioning incentives or things like that. So make the enlargement of the pension connected to in some way taking it or starting it at a later age. Some sort of creative option like that is worth having a look at.

Unearthed video clip combines with David McGuinty comments to damage Liberal prospects and leadership bid.

by Ish Theilheimer and Samantha Bayard

OTTAWA, November 22, 2012, (SGNews) — Federal Liberals and Justin Trudeau, resurgent in polls since Trudeau joined the party's leadership race, were dealt a double blow this week in the run-up to a prominent byelection in Calgary Centre. First, natural resource critic David McGuinty embarrassed his party with anti- Alberta comments and was censured by his own leader by having his critic portfolio yanked.

Then on Wednesday, the right-wing media empire Sun News aired a clip of Justin Trudeau two years ago in a French interview, in which he said, in French, "Canada’s in bad shape right now because Albertans are controlling our community and social democratic agenda. That’s not working."

Then he was asked if he thought Canada was "better served when there are more Quebecers in charge than Albertans." Trudeau replied, "I'm a Liberal, so of course I think so, yes. Certainly when we look at the great prime ministers of the 20th century, those that really stood the test of time, they were Mps from Quebec… This country, Canada, it belongs to us."

Although Trudeau's campaign team says the comments were taken out of context, observers see this comment as a body blow both to Liberal aspirations in Monday's byelection and to his own leadership bid. Even though the comments were from two years ago, they will be used repeatedly against him to by those raising judgement or arrogance as issues.

Immigration Jason Kenney was all smiles over the clip and seized the occasion to make himself available for a scrum with reporters, which Conservative Cabinet ministers rarely do. "This is another reflection of the arrogance of the Liberal Party, its divisiveness," he told reporters. "Yesterday Mr. Trudeau said that essentially David McGuinty was being divisive and that his campaign, the Trudeau campaign, is based on bringing Canadians together from all regions. And so we would ask, if that’s true, why was he on Quebec television criticizing Albertans for being involved in national politics, in our Parliament, for taking an active role in our country’s future?"

Jason Kenney pounces on anti-Alberta comments by McGuinty and Trudeau in a rare scrum.

Council of Canadians says it has proof of fraud in six ridings.

OTTAWA, November 21, 21012, (SGNews) — Follwing new reports that Elections Canada knew of Conservative voter misdirection efforts in the days before last May's federal election, the Council of Canadians announced the next step in its litigation to throw out results in six ridings.

Gary Neil thinks fraudulent criminal activity can be proved in the 2011 election

"The remedy is to find a culprit and prosecute them criminally. The remedy for an individual elector is to take an action under section 524 of the Elections Act, and say this fraudulent criminal activity occurred in my riding and it affected the outcome," the organization's executive director Garry Neil told a news conference.

Sandra McEwing, an applicant from the riding of Winnipeg South Centre, described her fears: "I find it terrifying the idea that something so important the ability to choose a leader would be fair game for skullduggery…Not just the attempt on me but finding out that it's a widespread attempt is frightening to me." She described the attempts to mislead Canadians about polling stations as similar to an attempt to break into one's home, and wants to see the perpetrators disqualified for crossing over the line, just a runner's do.

Winnipeg voter Sandra McEwing describes her fears about election fraud

Steven Shrybman, one of the applicant's lawyers, from the firm Sack explained what is necessary to prove in the election fraud legal challenge. "It isn't just a certain number of people didn't vote, because if that number is spread evenly among all of the political parties, the outcome of the election would arguably be the same. So we had to establish two things, that a certain amount of people didn't vote and that certain types of electors were more likely to be deterred from voting."

No proof Harper's trade lobbying helps: Paul Dewar.

OTTAWA, November 20, 21012, (SGNews) — A leak to the CBC today detailed a new Canadian foreign policy agenda from Harper's Conservatives, in which pursuing corporate trade deals trumps human rights and democratic concerns — despite lack of any evidence this approach actually boosts Canadian jobs.

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Mulcair wants guarantees Canada won't again arm South Asia.

by Ish Theilheimer and Samantha Bayard

OTTAWA, Straight Goods News, November 6, 2012 — In the House today Tom Mulcair asked for but did not receive guarantees that the Prime Minister's nuclear agreement with India will only be used for peaceful purposes.

John Baird sidestepped the question saying Canada, "will honour all of our international agreements to ensure that Canadian nuclear material does not make its way into a weapons program."

Mulcair told SGN, "It’s quite clear that Canada was responsible for providing the nuclear material that went into the first bombs and that we’re going back 40 years. So Canada has always taken the position that we’re going to have our own ability to control what we would be sending to India in terms of nuclear material. Our question this afternoon was whether we'd got the guarantees that we require.

"What I got from John Baird was an ambiguous response. He said we were going to respect international agreements. But he never answered the question whether or not Canada's longstanding demand that before we treat again with India in matters of nuclear material that Canada would have the ability to check and to verify. We don't have that clearly from Mr Baird. He tried to divert the question."

Mulcair wants guarantees on India agreement