Credit is due to federal and provincial governments this week after reaching a long-needed agreement on pension reform. Predictably, there have been critics since the plan for an expanded Canada Pension Plan was announced. But this change is a win for the next generation – the young people who have seen their quality of life eroded from that of their parents.
In a previous era, more working people had benefits like inflation-indexed defined-benefit pensions provided through their employers. But the baby boomers were likely the last generation to enjoy such benefits in substantial numbers.
Times have changed.
These days, pension plans in the private sector often rely on voluntary contributions to savings plans and provide no guarantee of a decent income in retirement. About 60 per cent of Canadians don’t have a company retirement plan – and the numbers among the young are even higher.
Some critics argue Canadians shouldn’t be forced to save for their own retirement. But we would argue that indeed they do.
Finding extra cash to sock away is a near impossible feat for many, considering the flatlining of wages compared to the rising cost of living in a place like the Lower Mainland.
Expanding the CPP trades minimal pain today for a much larger benefit down the road. Contrast that with the prospect of the state having to prop up vast numbers of middle-class workers who didn’t save enough in another 30 years.
It’s not often politicians manage to think beyond the next election cycle. Kudos to them this time for being able to do just that.
– Guest editorial from the North Shore News
