Re­form in play?

Cape Breton Post - - EDITORIAL -

Was Stephen Harper’s Conservative gov­ern­ment cor­rect af­ter all when it raised the el­i­gi­bil­ity age for Old Age Se­cu­rity (OAS)? For Cana­di­ans ap­proach­ing re­tire­ment, they cer­tainly didn’t think so. The new Lib­eral gov­ern­ment, which had cam­paigned against those changes, re­versed the pol­icy in its first bud­get last March.

The late Jim Fla­herty’s 2012 fed­eral bud­get planned to grad­u­ally raise the OAS el­i­gi­bil­ity age from 65 to 67 start­ing in 2023. The con­tro­ver­sial mea­sure was aimed at re­duc­ing the costs as­so­ci­ated with this coun­try’s ag­ing pop­u­la­tion. Cana­di­ans are liv­ing longer and the num­ber of se­niors is grow­ing – es­pe­cially in At­lantic Canada.

That ar­gu­ment is con­vinc­ing, es­pe­cially for fed­eral Fi­nance Min­is­ter Bill Morneau, try­ing to deal with to­day’s harsh eco­nomic re­al­ity and ex­pen­sive elec­tion prom­ises.

Over the last two years, Canada was dealt sig­nif­i­cant eco­nomic blows from the steep de­cline in oil prices in the global down­turn. Re­tire­ment re­form would likely lead to im­proved eco­nomic growth, but it comes with con­sid­er­able po­lit­i­cal bag­gage.

Morneau’s blue rib­bon Ad­vi­sory Coun­cil on Eco­nomic Growth is pub­licly sup­port­ing re­tire­ment re­form. In a re­port Mon­day, the panel says Cana­di­ans should be en­cour­aged to de­lay re­tire­ment by rais­ing the el­i­gi­bil­ity age for OAS, CPP and other ben­e­fits as a way of boost­ing labour force par­tic­i­pa­tion.

That doesn’t sound like en­cour­age­ment. It’s putting a gun to the heads of many Cana­di­ans who would de­pend on social se­cu­rity blan­kets to af­ford re­tire­ment.

Morneau gave the panel’s sug­ges­tion a pos­i­tive re­sponse Mon­day. Keep­ing Cana­di­ans over 55 work­ing to age 67 would pump an ex­tra $56 bil­lion into the coun­try’s Gross Do­mes­tic Prod­uct. Ex­tra taxes and added con­sumer spend­ing are mu­sic to Morneau’s ears.

The thumbs-up lasted one day. Tues­day, cab­i­net swiftly re­jected the pro­posal. Prime Min­is­ter Justin Trudeau and other cab­i­net ministers, blood­ied over the pound­ing they took for back­track­ing on elec­toral re­form, were in no mood to re-ex­am­ine re­tire­ment age and break an­other Lib­eral prom­ise. The gov­ern­ment is now look­ing at other in­cen­tives to keep work­ers in the work force longer, if they’re able and will­ing. That makes sense.

Canada is buck­ing a world­wide trend among top in­dus­tri­al­ized coun­tries. Cur­rently, 21 of the top 34 coun­tries are in­creas­ing their age of re­tire­ment el­i­gi­bil­ity. Only Canada is low­er­ing that age. The U.S. will reach 67 by 2022, the U.K. by 2028, and Aus­tralia by 2030.

Morneau’s ad­vi­sory coun­cil car­ries a lot of weight. It con­sults with cab­i­net ministers, senior pub­lic ser­vants, in­dus­try lead­ers and aca­demics on op­tions for boost­ing eco­nomic growth. Gov­ern­ment adopted many of its first round rec­om­men­da­tions last fall. Five new re­ports were pre­sented Mon­day and many of those will be ac­cepted as well.

As long as Morneau re­mains fi­nance min­is­ter, the Con­ser­va­tives’ re­tire­ment pro­posal will al­ways be in play. He hints that Harper and Fla­herty were on the right track.

As for or­di­nary Cana­di­ans – with de­pleted bank ac­counts star­ing back at us – we may have to de­lay those plans to loll on a river­bank with fish­ing pole in hand.

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