Now is the time to expand the CPP: New CLC research shows enhancements affordable
OTTAWA ― Ken Georgetti, president of the Canadian Labour Congress, says that the time for action has arrived on expanding the Canada and Quebec Pension Plan (CPP/QPP).
“Retirement security is one of Canadians’ biggest concerns and rightly so,” Georgetti says. “There’s no big secret why we should expand the CPP – it simply makes sense.” Georgetti’s comments come as Canada’s finance ministers plan to meet in Ottawa and at Meech Lake on December 15-16. CPP reform will be uppermost on their agenda.
The CLC has been advocating since 2009 for improvements to the CPP-QPP which would guarantee income security for Canadians when they retire. Georgetti says, “Some vested interests in banks or financial institutions that make huge profits from RRSPs and PRPPs are saying it’s not the right time and that the economy is too fragile to allow for improving the CPP. They are dead wrong and our research shows that.”
CLC researchers have compared the financial situation today with that in 1995, just prior to an increase in CPP premiums, which placed the plan on a firm footing. “We have the numbers to prove that current economic conditions are not a barrier to CPP expansion,” Georgetti says. “In fact, expanding the CPP would be good for the economy.”
Georgetti says the need for pension reform is urgent. “Fully 12 million Canadians – two-thirds of all workers – have absolutely no workplace pension plan and that situation is getting worse, not better. Just one-third of all Canadians invest anything in Registered Retirement Savings Plans or RRSPs.”
He says that Canada faces stark choices. “Those without adequate pension retirement income will be dependent on the federal government’s Old Age Security and Guaranteed Income Supplement programs to get by. But by 2030 – unless we expand the CPP – the annual costs of the OAS and GIS are projected to triple to $108 billion. That’s an inter-generational tax transfer to young people – they’ll bear the brunt of our inaction through more support for poor seniors in the future, and a bleak outlook for their own retirement with inadequate pensions.”
Georgetti adds, “Many provinces across the political spectrum support expanding the CPP and now it’s time for the federal government to show real leadership. The time for talk has ended and the time for action to expand the Canada Pension Plan is now.”
Georgetti will also be available through December 16 to comment on the progress and outcome of the finance ministers’ meetings.
The Canadian Labour Congress, the national voice of the labour movement, represents 3.3 million Canadian workers. The CLC brings together Canada’s national and international unions along with the provincial and territorial federations of labour and 130 district labour councils.
Web site: www.canadianlabour.ca
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