Martin Regg Cohn writes that federal bureaucrats have presented Finance Minister Jim Flaherty with a plan to shore up the faltering Canadian pension system. Private pensions have been decimated by the Neo Conservative Revolution. Cohn writes:
The world of pensions is collapsing around us. Traditional “defined-benefit” pensions that reliably promise to pay a fixed amount in future — really the only payments worthy of the name “pension” — are being phased out in the private sector. The registered savings and pooled plans offered up as alternatives are merely Potemkin pensions — glorified savings plans that expose workers to the risk of stock market volatility and the madness of high management fees charged by Bay St.
The bureaucrats argue that Canada is in the unique position of being able to afford an overhaul of the pension system:
“Canada’s current social security contributions and payroll taxes are relatively low compared to other OECD (Organization for Economic Co-operation and Development) countries,” the paper notes pointedly.
Currently, Canada allocates a mere 5.5 per cent of its economic activity (GDP) to social security and payroll taxes. If all the improvements outlined in the paper were phased in, the percentage would rise to 6.3 per cent. Even under this improved scenario, Canada’s contributions would still be low by OECD standards — and remain at the very bottom of the G-7 group of industrialized countries.
Mr. Flaherty's prime directive, however, is to keep Bay Street happy:
He announced yet again Friday that “this is not the time to put another burden on employers and dampen employment prospects of Canadians,” citing the supposed “softness of the economy.”
Flaherty is adamantly opposed to reform, even though he recently admitted that those profits on Bay Street are, in truth, nothing but "dead money." For a man who was trained as a lawyer, Mr Flaherty has an astounding immunity to evidence.