Canada's pension system is in play

Canada’s pension crisis was the sleeper issue of Canadian politics two weeks ago.  No longer – politicians have suddenly woken up and changes to Canada’s pension system are in play. 

The turning point was just a week ago when 4,000 Nortel pensioners and supporters rallied on Parliament Hill.  Until last Wednesday, the pension crisis was defined by victims while political solutions amounted to nothing but platitudes.  The Nortel rally was a tipping point that focused media and public attention and provided a platform for political leaders to show what they have.

The first big political shift came before the day was out when Michael Ignatieff told the crowd, “I hear you – the BIA must be changed…”  That comment signaled a change in Liberal policy which had been to support the privileged position of banks and secured creditors ahead of workers and pensioners when companies and pension plans get in trouble.

The next day, Jack Layton took the spotlight with a bold proposal for pension insurance and a doubling of Canada Pension Plan benefits.  Modeled to some degree on the ideas developed by the Canadian Labour Congress, the NDP proposals were the first serious initiative to address the retirement crisis facing the great majority of Canadians with no pension plan, and the immediate crisis facing many of the 25% or so of Canadians with an employer sponsored pension plan.

Monday, the Liberals held an extensively promoted policy retreat on pensions, but looked very much like a group in catch-up mode.  The Nortel Pensioners Association and the CLC were among the presenters to the Liberal conference, and reports from the meeting are that the Liberals are now leaning towards supporting an increase in CPP benefits and other pension reforms.

Then the Conservatives joined the game with their own hurried up announcements on changes to federally regulated pension plans.  While somewhat interesting and long overdue, the government’s proposals to change a number of the rules for pension plans won’t do very much to address the funding crisis faced now by the major pension plans in the country. 

The federal policy changes also do not apply to the large majority of plans that are provincially regulated.  However the federal announcement produced an echo from Ontario’s finance minister who a day later announced that provincial reforms are also on the way in the largest provincial jurisdiction.  Quebec will also be acting to change its recently adopted Bill 1 which provides for the government to assume responsibility for an insolvent pension plan.  As it turns out, the law is inadequate to deal with its first case – the Quebec Nortel pensioners.

The political point about all this is that the legislative agenda on pensions was opened up because of political pressure from labour, retiree and pensioner organizations.   Solid research, political lobbying and campaigning, demonstrations and alternative policy proposals delivered media attention, political initiative by the NDP, a shift in positioning by the Liberal Party, and an opening to change the law.

If a week can produce movement like this, much more is possible.  Policy changes that may be helpful in moderating future problems for private pension plans are no substitute for addressing the emergency faced now by tens of thousands of workers and retirees with insolvent pension plans.  And there is a political moment, now, to reach out for the doubling of CPP and an answer to the retirement insecurity of millions.

Comments