Dear Editor:
Since 2010 there has been a growing awareness among provincial, territorial and federal finance ministers that Canadians are facing a pension crisis.
Far too many of us are unable to put enough money aside, either in pension plans or savings, and, as a result, face the prospect of a bleak retirement.
The good news is that this situation can be corrected by enhancing Canada Pension Plan benefits, the cost of which would be a modest increase in both employer and employee contribution rates.
The bad news is that Canadian employers, led by the Canadian Federation of Independent Business, has mounted a strong campaign against the proposal on the grounds that the "fragile" economy can not support a rate increase.
Unfortunately that view has prevailed with some politicians, particularly at the federal level, and the proposal has been left languishing on the table for the last three years.
The matter will be revisited this December at the federal-provincial ministers annual meeting. And guess what? The federation is still singing the same refrain.
It is predicting that raising the employer CPP "payroll tax" by as little as 1.5 per cent will have a negative impact on job growth as well as depress wages. Moreover, it is advancing the argument that employees themselves can ill afford a matching 1.5 per cent increase.
In the first place, it is misleading to represent CPP contributions as a "payroll tax."
Both employer and employee pension contributions represent a portion of earned wages and are more properly described as salary set aside (or deferred) for payment at a future date in the form of pension income.
So, for the record, this is not about increasing taxes. It's about employers participating in a plan to provide an affordable retirement for their employees.
Secondly, it seems to me that arguing that today's employees cannot afford to contribute more of their earnings to CPP is a tacit admission that wages are already depressed. Will the federation agree to support raising the minimum wage laws to help correct this inequity? Or lobby for a general wage hike so everyone will have more money to put towards retirement?
Of course not. Its mandate is to keep employer costs down, not increase them. In fact, it can be expected that when it comes to labour costs the federation will continue to pursue a race to the bottom philosophy.
So let's recognize the self-serving nature of its position on CPP enhancement and give it the short shrift it deserves.
And let's hope this is exactly what the finance ministers of this country will do when they sit down together next month.
Bill Brassington, Burnaby
