It Is Important To Improve the Canada Pension Plan (CPP)

During this election UFCW Canada and the CLC have proposed to double CPP benefits through increased contributions over a seven year period.

We must do this.

Our retirement income system needs to guaratee workers an income they can count on after leaving paid work. The CPP and the Old Age Security (OAS) provide only a bare bones-pension. Most workers must rely on the private part of our pension system (employer pension plans and RRSPs).

Experience has shown that private pension plans provide, at best, uncertain returns. In the recent financial crisis, many RRSPs lost a large piece of their value and some employer pension plans went under – leaving unfunded pension promises. This is why our governments must improve CPP and OAS.

Over the next twenty-five years, the number of Canadians aged 65 and over will more than double, and the number of seniors for every 100 persons in the workforce will also double, from 20 to 40. This will increase services, including health care, to the provinces. The pressures on Provincial budgets arising from population ageing would be significantly reduced if future seniors had better pensions than they will if the CPP is not improved.

The banks and big business are opposed to improving the CPP claiming “it’s a job-killing tax”. The reality is that CPP contributions are not a tax, they are a savings. CPP contributions do not discourage employers from hiring workers. When CPP premiums stopped rising in 2003, the unemployment rate stood at 7.6% and continued to drop every year until the 2008 recession. So much for that “job-killing tax” nonsense.

Forty years ago unions had to fight to get public health insurance. We can win this fight also and make Canada a better country.