Banks Threaten Canadian Pension Plan

Finance Ministers from across Canada are currently meeting in Kananaskis, Alberta to discuss expanding the Canada Pension Plan to prevent a potential crisis in retirement income for future retirees. 

The meeting is being touted as a critical turning point on the magnitude of legislation that established the country’s Medicare program, and at stake is the retirement income of Canadians who worry about how they will support themselves as senior citizens. Many Canadians are already behind in saving for retirement due to the economy, and many more have been stung by RRSP and mutual funds disasters.

The Opposition

But though eight of the provincial ministers (Quebec now sides with Ottawa) are aware of the urgency of the issue, it remains to be seen if they can overcome the opposition of Alberta’s Finance Minister, Ted Morton, and a surprising recent defection by federal Finance Minister Jim Flaherty, who withdrew his support after being pressured by Prime Minister Stephen Harper and the private finance industry.

Morton and Harper’s opposition is ideological. The Conservative Party is heavily in debt to banking and financial interests who stand to lose a great deal of money if Canadians are allowed to put more of their savings into the government CPP plan as opposed to individual retirement savings (RRSP’s) and mutual funds that are managed – for hefty fees – by private financial industries.

Alberta Tories Misrepresent

The Alberta Conservative Party, which is scrambling with a health care confidence crisis at the moment, is doing its level best to downplay a host of alarming facts about retirement savings problems. Morton is even misrepresenting the CPP program as a tax payer “social program,” which couldn’t be less true.

In fact, CPP is not funded by taxes at all. It’s financed by matched contributions from workers and their employers and expanding the program would only mean that each group would be required to put a little more of their own earnings and profits aside for future retirement use. It is nothing more than a system that helps Canadians save for their own retirements. What could be wrong with that?

Everything, if you are a bank or financial institution that profits from private retirement programs, and the banking industry stands to lose a few end-of-the-year bonus dollars if the provinces in favor of CPP expansion stand their ground. 

Federal Finance Minister a Tool for Private Industry

Flaherty is now shilling a plan for “pooled funds,” which would be run by banks, insurance companies and the mutual fund industry – for a “reasonable” fee. Unlike CPP, these pools would not be guaranteed, nor would they have employer match contributions. They are much like the RRSP’s that are failing to help Canadians prepare for their old age already.

Banks Have Won Before

The last time there was a call for CPP expansion was 1979. Then it was Alberta, Ontario and behind the scenes support from the banks and mutual fund industry that sunk the proposal. With the exception of Ontario’s defection, nothing much has changed. Conservative ideology and private interests are still working against average Canadians to deprive them of saving for their own retirement.

Perhaps if the banking and other industries looking to profit off the wages of the worker were selling a better product, this wouldn’t be an issue at all, but as usual, capitalist interests prefer to stack the decks rather than improve.

What Do You Think?

In the U.S. and in Canada, banks, the mutual fund industry and private financial institutions are living large off profits from products that have not helped the average worker prepare for retirement at all. When will government learn and start protecting the taxpayer? 

Let’s hear your thoughts.

Related Stories: 

More Hungry Canadians: Canada’s Food Bank Use on the Rise

No Tea Party in Canada

Families Forced to Choose: Retirement or College?

 

Photo credit: Canadian Finance Minister Jim Flaherty by Rocco Rossi

67 comments

Debrah McCabe
6 years ago

No Heather, I just have issues with a woman who presents someone elses research and writing as her own. And if you'd taken the time to read through the comments here, you would have seen that I was grateful that the whole CPP issue was brought up, because it caused me to research it more and in fact to contact my MP and let my government representative know how I feel about it. But I guess you were too busy to actually do any "research" yourself and just made a comment based on, well, I'm not sure what you made a decision based on. You must have been in the same kind of hurry that prevented Anne Bibby from writing her own article on the subject.

SEND
heather g.
heather g6 years ago

Wow! Some bloggers really react aggressively when the info. conveyed is less than positive. Please discuss or research the content, rather than shoot your vicious barbs aimed at the messenger. I guess you prefer the spin of politicians......

SEND
Donald MacDonald
don MacDonald6 years ago

" * Debrah McCabe says
* Dec 26, 2010 1:00 PM

As far as the article is concerned, you're right, Anne Bibbey's honesty has nothing to do with whether or not young people today will have CPP when they are my age and I am glad (as I've said before) that this was brought to our attention. " ...THANK YOU...I THINK...

" But Donald, whether or not a person has plagerised an article or a book or whatever, is entirely relevant to the person who wrote the original article. " ...BUT NOBODY WAS REFERRING TO HER, ONLY YOU WERE...

" That Anne Bibbey, with her American/Republican dislike of our system sees fit to "steal" the thoughts of another just goes to her credibility and honesty and is cause to not believe anything that comes from her. " ...THAT IS ENTIRELY BETWEEN YOU AND HER...

" And if you are not making an effort to effect change in the areas that you feel are problematic "...PLEASE STOP INFERRING THINS ABOUT ME...YOU KNOW NOTHING OF MY LIFE...

" by making your thoughts known to those who can make change (i.e. your MP for example), " ...IF YOU WISH REMAIN BLINDED BY THAT BULL$H!T PUPPET CAROUSEL, THEN HAVE AT IT...

I'VE KNOWN FOR SOMETIME POLITICS AND WRESTLING SCRIPTS ARE WRITTEN BY THE OWNERS OF THE GAME...


" then you have no right to expect anything but disappointment. " ...I HAVEN'T BEEN DISAPPOINTED SINCE I LOWERED MY EXPECTATIONS...

" You label your MP a sociopath " ...THEY ARE WHAT THEY ARE, DESPITE THEIR MEDIA FACADE...KINDA LIKE THE POPE

SEND
Debrah McCabe
6 years ago

I am 55 years old John and it seems to me that it's not seniors who are going to lose out on our pensions. But whether or not there will be a CPP for my daughter who is 26 even though she and her employer are required to pay into the plan is the question, or my grandson when he starts the work cycle is the concern. It has been stated that there will be "adequate" CPP for 75 years. What happens after that? The $700 dollars per month that I would get at 65 gets whittled down to $500, then $400....til finally the seniors of that era receive IOU's?

The Canadian Labour Federation has suggested that a gradual increase in contribution levels over a period of 7 years would be required to support the futures seniors. Flaherty and several other ministers are suggesting that a "pooled" program might be tenable, but that will only be a "re-do" of RRSP's because it will take the management of CPP"S off the governments desk....cont...

SEND
Debrah McCabe
6 years ago

..cont...... and put it into the hands of banks, investment companies and financially illiterate individuals. The banks will make money on the fees that they will charge and the public will choose various mutual funds who will charge more fees....and in the end who will really profit by this kind of arrangement, only the banks et al.

The beauty too of the "increase" is that only those who actually contribute to that new arrangement will profit by it. They will ultimately get higher paybacks, while people like myself who contributed to the "lower" level will not get extra and that is only fair.

The more we discuss back and forth here, the more people become aware and word of mouth can do powerful things.

SEND
John Ses
John Ses6 years ago

Very little is written to make sure that seniors are not loosing out on their pension. The discussion of whose idea it was in the first place is such "baby talk", and leads to nowhere. This is the first time I have heard of news of the governments intent, hopefully, we can get more of the info out to people in a different medium.

SEND
Debrah McCabe
6 years ago

As far as the article is concerned, you're right, Anne Bibbey's honesty has nothing to do with whether or not young people today will have CPP when they are my age and I am glad (as I've said before) that this was brought to our attention. But Donald, whether or not a person has plagerised an article or a book or whatever, is entirely relevant to the person who wrote the original article. That Anne Bibbey, with her American/Republican dislike of our system sees fit to "steal" the thoughts of another just goes to her credibility and honesty and is cause to not believe anything that comes from her.

And if you are not making an effort to effect change in the areas that you feel are problematic by making your thoughts known to those who can make change (i.e. your MP for example), then you have no right to expect anything but disappointment. You label your MP a sociopath and that is supposed to excuse your lack of involvement? I don't infer anything Donald. Your effort at excusing your lack of involvement smacks of laziness and nothing more. You are the sort of person who allows the evolution of a social environment that does nothing more than use and abuse the populace. Without standing against the betrayal that is foisted upon the public by governments, only more betrayal will occur.

At least I have tried to do something on this issue. What did you do? Nothing.

SEND
Donald MacDonald
don MacDonald6 years ago

" * Debrah McCabe says
* Dec 25, 2010 2:20 PM

So what does that mean "the best information doesn't always come from choir boys"? Given that I was pointing out the AMAZING similarity of Anne Bibby's (article) to that written by another, one Gil McGowan, and you come up with that? " ...SORRY, I WAS JUST BEING POLITE...IT WAS EITHER THAT OR POINT OUT THAT YOUR DISLIKE FOR THAT PERSON HAS NOTHING TO DO WITH THE SUBJECT MATTER...


"If she'd given him credit for her "thoughts" I would not even have mentioned it. But instead, she allows all to think that she came up with the information. At best a major paraphrase, at worst plagiarism. "...LIKE I SAID, RELEVANT ONLY TO YOU...

" If you can't catch it when someone agrees with you, then that is your deficit, not mine...ITS REALLY HARD TO TELL WITH YOU...YOU'RE ALL OVER THE MAP...

" I don't rip people for their opinions. I will disagree sometimes, but it is a pet peeve of mine that so many have negative opinions on any given subject but when pressed to offer solutions or other ideas, they have none. "...TO WHOM DO YOU REFER, OR IS INFERENCE YOUR STOCK AND TRADE ?...

" By the way, have you contacted your MP or do you also just like to complain? " ...NO, I LEARNED A LONG TIME AGO THAT SOCIOPATHS AREN'T GOOD LISTENERS...


" I personally have communicated with Jaimie Baillie (my MP) twice in the last three days about this very thing and received a reply from his office. "...YEAH, AN ACKNOWLEDGEMENT THAT YOU W

SEND
Debrah McCabe
6 years ago

And if you don't step up and at least try to have an effect on the status quo, then you get what you deserve, which is nothing. Email your MP.

SEND
michael c.
corbin m6 years ago

Doesn't matter the country, conservatism is the same all over. And all over, they don't have people's interests at heart.

SEND