The CBC has obtained a review of Canada's retirement system which was done for the Privy Council Office. The document has been heavily redacted. But its conclusions are clear:
"In 2010, Canada spent 5.0 per cent of GDP on public pensions (OAS/GIS and C/QPP), which is low compared with the OECD (Organization for Economic Co-operation and Development) of average of 9.4 per cent," it noted.
"The OECD projects that public expenditure on pensions in Canada will only increase to 6.3 per cent of GDP by 2050 – much lower than the 11.6 per cent of GDP projected for OECD countries on average."
The document also says Canada's public pensions "replace a relatively modest share of earnings for individuals with average earnings" compared with the OECD average of 34 countries; that is, about 45 per cent of earnings compared with the OECD's 54 per cent.
"Canada stands out as one of the countries with the smallest social security contributions and payroll taxes."
The Harperites claim that they are making up the gap with Tax Free Savings Accounts. But the review raises serious concerns about the overall efficacy of TFSA's:
The document notes that participation rates for TFSAs rise with income, with only 24 per cent of those making $20,000 annually or less contributing, compared with 60 per cent in the $150,000-plus bracket.
The review also acknowledges "it is still too early to assess their effectiveness in raising savings adequacy."
The report is another example of the Harper government ignoring its own expertise. If the information falls outside Stephen Harper's ever shrinking frame of reference, it is ignored. Benjamin Perrin reminded us this week that Mr. Harper does this to his own detriment.
John Ibbitson writes admiringly about Mr. Harper's force of will. Others might call it colossal stupidity.