‘Self-interested groups want to force Canadians to rely upon privately-administered PRPPs and RRSPs as vehicles for retirement savings’
By Dennis Gruending –
The President of the Canadian Labour Congress says that the Conservative government is deliberately trying to sabotage federal-provincial talks aimed at improving the Canada Pension Plan.
“Finance Minister Flaherty is ignoring the wishes of Canadians and this country’s foremost pension experts who support an expanded CPP,” says CLC President Ken Georgetti. “Mr. Flaherty prefers to listen to special interest groups such as the Fraser Institute and the Canadian Federation of Independent Business (CFIB), who don’t want to pay their share toward improving pensions for working Canadians.”
Georgetti says those self-interested groups want to force Canadians to rely upon privately-administered PRPPs and RRSPs as vehicles for retirement savings. “The financial services industry wants to see investments in products that line their pockets but don’t help the average Canadian save for retirement.” He points to a May 2013 Morningstar report that gave the Canadian mutual fund industry an “F” for having the highest fees and expenses out of 24 countries surveyed.
Talks aimed at expanding the CPP have been occurring for several years but the federal finance minister has repeatedly dragged his feet. In the summer of 2012 Canada’s premiers and territorial leaders asked that the country’s finance ministers present options for “modest enhancements” to the CPP. By December 2012, officials had provided a series of affordable options but Minister Flaherty said the time was not right. He promised another meeting in June 2013 to decide upon what a modest increase to the CPP would look like and what would trigger such an increase.
“June is almost over and no meeting has been called,” says Georgetti. “The minister is deliberately trying to sabotage talks to improve the CPP.”
Georgetti says that 60% of workers have no workplace pension, while one-third of Canadians between the ages of 24 and 64 have no personal retirement savings. “If the government won’t allow workers and their employers to provide for decent pensions through the CPP, future taxpayers will have to spend billions of dollars more than they do now in social programs for retirees who will be living in poverty.”