Experts gather to discuss how to solve Canada’s pension crisis: Edmonton summit to focus on finding real solutions
Edmonton - A crisis in retirement income is looming in Canada and Albertans will be among those hurt the most - unless there's real reform of the nation's pension system.
"Albertans have the lowest retirement savings in Canada," says Gil McGowan, president of the Alberta Federation of Labour (AFL). "By 2030, 67 per cent of Albertans will not have enough for a dignified retirement. Currently, 31 per cent of Albertan seniors live on less than $16,000 per year today."
"Albertans are less likely to be covered by an employer pension plan than other Canadians - and those with pension coverage are likely to have inferior coverage compared to other Canadians. Only 38 per cent of Albertans contributed to an RRSP in 2008, and the median contribution was only $3,200 per year," he adds.
Because of the clear need for action on the pension crisis - and with Canada's finance ministers due to discuss pension reform in Kananaskis, Alberta, next month - the AFL and the Canadian Labour Congress (CLC) will hold a summit in Edmonton on Saturday, November 27th, and will bring in some of the country's leading pension experts to discuss pension reform. Participants in the summit, Pension Reform or Poverty: How to Solve Alberta's Retirement Crisis, include:
- Bernard Dussault, former chief actuary of the Canada Pension Plan (CPP) and Old Age Security (1992-1998). He is the author of a bold proposal for a universal pension plan that has won national attention;
- Dr. Jonathan R. Kesselman, a professor at Simon Fraser University's School of Public Policy and Canada Research Chair in Public Finance. He is the author of a research paper released by the University of Calgary that has become extremely influential in the national pension reform debate;
- Gil McGowan, President of the Alberta Federation of Labour (AFL), which represents 140,000 workers. Earlier this month, the AFL launched a campaign for real pension reform, urging Alberta to abandon its opposition to CPP expansion;
- Hassan Yussuff, Secretary-Treasurer of the CLC, which represents 3.2 million workers. The CLC has led a national campaign to expand CPP;
- Paul Moist, National President of the Canadian Union of Public Employees (CUPE), Canada's largest union with 600,000 members. He has led his union's campaign for solutions to the pension crisis.
Time: 10:00 a.m., Saturday, November 27, 2010
Location: Grant MacEwan University, Main Floor Multi-purpose Room, 106th Street Building, 10700 - 104 Avenue, Edmonton
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Gil McGowan, President, Alberta Federation of Labour Cell 780-218-9888
The Alberta Federation of Labour said in a recently released report that the government needed to take into account the growing number of retiree's needs and that they needed to extend the CPP in order to help those who do not have enough to retire. Gil McGowan, the group's president said that the government needed to help the business sector.
"The government has taken some steps in the right direction to improve health and safety at work, but Alberta can - and must - do better," says Gil McGowan, president of the AFL. "As the economy picks up, especially in the oil patch and construction sectors, the government needs to take immediate action to improve health and safety. If simple changes aren't made today, Alberta will return to the highest number of workplace fatalities in Canada. Only last month, three workers died in workplace accidents in three days."
Elected in 2005, McGowan has been tasked with representing workers from all different sectors of the Canadian workforce. Small and large businesses rely on unions to give employees a voice.
NEBS, Fri Nov 19 2010
EDMONTON - The Alberta Federation of Labour says the provincial government needs to get on board with Canadian Pension Plan reform or get out of the way.
In a report released Tuesday, titled "It is broke ... so fix it!" the AFL warns that a significant number of Albertans are facing a lower standard of living once they retire.
According to the report, while the average Albertan's pension is $60,000, more than half of senior families have no pension. Among those without pensions, 38 per cent have RRSPs or Registered Retirement Investment Funds.
"Albertans simply don't have enough money to provide what they need when they retire, and the problem is getting worse all the time," said Gil McGowan. "Despite our wealth as a province, we're not being spared this problem."
As the province plans for a surge in Alberta's senior population as the baby boomers reach 65, McGowan said the government needs to support expanding the CPP.
In a meeting of Canada's federal and provincial finance ministers in June, the consensus was to work on a plan that would see a modest increase in the Canadian Pension Plan benefit. Since then, Ted Morton, Alberta's Minister of Finance and Enterprise, has been the only minister to publicly oppose the increase. Morton said the current pension system is very good and that reforms would do more harm than good.
"The problem is very specific; it's not the higher income brackets, it's not in the low income brackets, there's a certain portion of middle-income Canadians that haven't saved enough for retirement," he said. "That's where the remedy has to focus."
Morton said increased CPP contributions are an additional, unneeded payroll tax that would hurt economic recovery efforts.
"We still have an unemployment problem in Canada," he said. "Putting an extra payroll tax on employers is not the thing to do when you're trying to create more jobs."
NDP MLA Rachel Notley said the reforms were long overdue and said the ministry was taking a backward approach.
"If you compare us to many much more progressive countries, particularly in Europe, our low level of retirement planning is quite shameful," Notley said.
Edmonton Journal, Wed Nov 17 2010
Byline: Conal Pierse
The Alberta Federation of Labour (AFL) is calling the Alberta government out on its stance against an enhanced Canada Pension Plan (CPP).
In a report released on November 16 by the AFL, It IS broke...so fix it!, the labour organization makes it clear that it believes the provincial government is not acting in the best interest of Albertans.
Alberta's Minister of Finance and Enterprise, Ted Morton, has said that raising CPP premiums will cause job losses in the province. However, the AFL claims there is no evidence to support that view.
"Experience with policy measures that increase payroll costs, including both payroll taxes and minimum wages, shows that the effects, if any, are so small that they are swamped by the normal ebbs and flows of economic activity," the AFL report says. "Extensive academic literature finds no basis for claims for long-term negative employment effects from payroll taxes."
The report goes on the say that pension coverage is weaker in Alberta than in other provinces and that Albertans are in fact, not better off in the current system than other Canadians, as their government suggests.
"So while the government of Alberta's opposition to an expansion of the Canada Pension Plan may serve the interests of the Canadian retail mutual fund industry and support the living standards of its high-flying leaders," the report boldly states. "It does not serve the interests of Albertans."
Canada Benefits, Mon Nov 16 2010
Byline: April Scott-Clarke
Launch of AFL Real Pension Reform Campaign
November 16, 2010
Matrix Hotel, Edmonton, Alberta
Good morning and welcome.
We've invited you here today because a crisis is looming: a crisis in retirement income.
It's a crisis which, in many ways, has already begun ... but which will only worsen as more and more Canadians reach retirement age without adequate savings.
It's a crisis which will rob millions of Canadians of security and dignity in their retirement years.
It's a crisis that will hurt the economy as the spending power of the seniors shrinks.
And it's a crisis from which Albertans will not be spared.
The good news - and there is good news - is that nine provinces and the federal government recognize that a serious problem exists and are prepared to do something about it.
The bad news is that our province, the province of Alberta, is acting as a spoiler and standing in the way of a real national solution.
Other provinces and the federal government agree that Canadians aren't saving enough for retirement.
They agree that fewer and fewer people are covered by workplace pensions.
They agree that the private investment industry has failed miserably to deliver on all the promises they've made over the years about private retirement savings and the dream of Freedom 55.
Other provinces and the federal government also agree on what action needs to be taken.
They agree that a big part of the solution lies in expansion of that one part of pension picture that remains solid: the Canada Pension Plan.
Unlike many private sector workplace pensions, CPP is fully funded and actuarially sound for at least the next 75 years.
It's also portable from job to job and from province to province.
And unlike mutual funds, CPP charges rock-bottom management fees and provides a guaranteed benefit, as opposed to the uncertainty of most mutual funds which are tied to fluctuations in the stock market.
The only real problem with the CPP is that it's too small. With an average annual payout of only $6,000 and a maximum annual payout of only $11,000, CPP is one of the least generous national pension plans in the developed world.
Pension experts say that people need income equivalent to about 70 percent of their pre-retirement income to maintain their standard of living in retirement. But CPP only replaces about 25 percent for people earning $47,000.
That's where we in the labour movement think pension reform needs to start.
We're calling for a gradual doubling of CPP benefits, so that CPP can replace 50 percent of pre-retirement income for people earning $47,000 a year.
It's a modest, incremental solution which has been endorsed by seniors groups, by student groups, by prominent economists and academics and, as I've said, by the Finance Ministers and Premiers from every province except our own.
Even the federal Conservatives support CPP expansion.
Federal Finance Minster Jim Flaherty is behind the idea. Prime Minister Stephen Harper has given it his stamp of approval.
Even Diane Ablonczy, one of the last remaining original Reform Party MPs and currently Secretary of State for Seniors, is giving CPP expansion her support.
Just two weeks ago, I had a long talk with Minister Ablonczy in her office on Parliament Hill.
She admitted that, for ideological reasons, she hesitated to support CPP expansion.
But as the federal minister responsible for seniors, she said she's met too many seniors who simply can't make ends meet.
She's seen too many seniors who worked hard all their lives, raised families and contributed to their communities ... but who didn't have workplace pensions and just couldn't find any money at the end of the month to save for their retirement.
That's why she says we need across-the-board, mandatory solutions like an expanded CPP.
Unions. Seniors. Students. Economists. Provincial leaders. Federal leaders.
It's all part of what the Globe and Mail calls an "emerging national consensus" to address the looming crisis in retirement income by expanding CPP.
It's a consensus that could lead to a ground-breaking agreement when finance minister gather in Kananaskis a month from now. Alberta could be the site of an historic policy breakthrough ... or the meeting in Kananaskis could be remembered only as a missed opportunity.
At the moment, we remain optimistic ... but we're also more than a little frustrated.
The only dissenting voices to be heard on the issue of CPP expansion are coming from banks and insurance companies - who want to keep charging Canadians outrageous fees for the under-performing retirement planning services provide - and from the Alberta government, which has staked out an ideological position that is at odds with the facts and which does not reflect the opinion of Albertans or uphold their best interests.
Speaking on behalf of his government, Alberta Finance Minister Ted Morton has said that Albertans don't need an expanded CPP. He has said they don't want an expanded CPP. He has also said that real solutions lie elsewhere.
In particular, in speeches, in guest columns, and most recently in a new document entitled "Alberta Aging Population Policy Framework" (which was released just last week) Morton outlines a vision for seniors policy that most Albertans have not heard about ... but which almost nobody would support if they had.
For example, Morton says the onus should be on individual Albertans to save for their own retirements - even though the evidence clearly shows that most Albertans don't have enough money left over at the end of the month to set aside for an adequate retirement.
Morton says that if they don't have adequate income, seniors should be encouraged to sell of their assets, most notably their homes.
Morton also says the looming crisis in retirement income should be seen as an opportunity for businesses worried about labour shortages because it will force more and more people to keep working until their 70 or 75 years old.In fact, one of the only major policy promises in the government's new Aging Population Policy Framework is to provide new career counselling services to seniors ... presumably so they can spent their golden years working as Wal-Mart greeters instead of enjoying a dignified retirement.
But that's not all. If any additional pension programs are needed, Morton says they should be voluntary - meaning employers should be able to opt out if they chose - and they should be managed by the private investment industry as opposed to the lower-cost, more efficient and more accountable people who run the CPP.
That's the Alberta government's vision for retirement policy. Sell your house. Work until your 75. And keep paying exorbitant fees to banks and insurance companies for under-performing mutual funds.
That's why we're launching our campaign today. And that's why our slogan is "Hey Ted, Albertans want REAL pension reform."
Behind me, you see our new campaign website at www.realpensionreform.org.
On the site you'll find all sorts of information, documents and links dealing with issues of retirement insecurity and pension reform.
We're also releasing the results of a province-wide poll that we conducted last month.
Like previous polls conducted by other labour organizations and media outlets, our poll shows that an overwhelming majority of Alberta support expansion of CPP as a solution to the looming crisis in retirement income.
78 percent of those surveyed don't buy the argument advanced by Ted Morton that Albertans have already made adequate arrangements for their retirement.
67 percent don't buy the argument that banks and insurance companies should be chosen over the CPP to run an expanded pension system.
And 71 percent say Ted Morton and the Alberta government should "get out of the way and allow changes to CPP that will put more money in the pockets of all Canadians when they retire."
We're also releasing a report outlining the real situation in Alberta when it comes to retirement income.
The report was prepared for us by economist and pension expert Hugh MacKenzie - and is appropriately titled "It IS Broke - So Fix It!"
So how bad is the situation in Alberta? How great is the need for reform?
Well, our report shows that Alberta has the lowest proportion of workers covered by workplace pensions in the country - and that number is falling.
Our report shows that only 38 percent of Albertans contributed to an RRSP in 2008 - and the median contribution was only $3,200 a year.
Our report shows that 60 percent of Alberta's RRSP contributions are made by people earning more than $80,000 a year, meaning that middle and low-income Albertans are being left out and left behind.
Our report shows that in 2007 half of Alberta seniors had no investment income at all and that a third of them survive on less than $16,000 a year.
And our report shows that management fees charged by mutual fund companies are eating up between 40 and 60 percent of the investment gains earned by individual Albertans on their retirement savings.
That's the real face of Alberta's retirement income system. It's a system that's broken. It's a system that's exposing a growing number of Albertans to insecurity. And it's a system that will only get worse if major fixes are not implemented soon.
So the goal of our campaign is to send a message to two groups: the first being finance ministers from other provinces and the second being Members of the Legislative Assembly here in Alberta.
For finance ministers, our message is simple: Ted Morton doesn't speak for all Albertans.
If he changes his mind and supports the consensus in favour of CPP expansion great. But if he doesn't, if he sticks to his guns about doing nothing in the face of the growing pension crisis...well, then we want to make it clear that he's out of step with the majority of Albertans.
Our message for Alberta MLAs, and especially for members of the government caucus, is also clear.
We want to send them the message that CPP expansion is needed and that it makes sense.
We want them to understand that an expanded CPP would be good for individual Albertans because it will give them a low-cost way to generate an increased stream of guaranteed income in retirement.
We want them to understand that an expanded CPP would be good for employers, especially small employers, because it will allow them to provide increased retirement benefits for their employees without exposing them to the risks and liabilities associated with running their own pension plans.
We want them to understand that an expanded CPP will be good for taxpayers because it will mean that fewer people will have to rely on tax funded supplements like GIS.
Finally, we want them to understand that an expanded CPP would be good for our broader economy and society because it would give seniors more money to spend in their communities and it would allow them to live with security and dignity.
In the end, despite the spin coming from people like Finance Minister Morton, tens of thousands of Albertans are facing a bleak retirement future.
But it doesn't have to be that way. We know what needs to be done. The rest of Canada is in the process of mustering the political will to solve the retirement income crisis before it takes hold.
What's required now is for Albertans to speak out and to demand that their provincial government either get on board with the move to expand CPP or get out of the way.
Thank you all for being here this morning.
Let's hope that when Canada's finance ministers gather in Kananaskis this December Alberta will join them in delivering the Christmas present that Canadians really need - the gift of retirement income security.
Gil McGowan, President
Hey Ted, Albertans want REAL pension reform: Labour groups urge Alberta Tories to stop standing in the way of CPP expansion
Edmonton - A campaign for REAL pension reform was launched in Alberta today to persuade the provincial government to change its mind and join the growing consensus around expanding the Canada Pension Plan (CPP).
"A crisis in retirement income is looming in Canada and it will not spare Albertans, despite claims made by Finance Minister Ted Morton," says Gil McGowan, president of the Alberta Federation of Labour, which launched the campaign with the Canadian Labour Congress (CLC).
Federal Conservatives including Prime Minister Stephen Harper and Finance Minister Jim Flaherty support expanding CPP. They are joined by nine provinces, seniors groups, student groups, economists and labour groups in the consensus forming around CPP expansion. With such widespread support, there's hope a ground-breaking agreement can be reached when Canada's finance ministers gather in Kananaskis next month.
"Alberta, however, is acting as a spoiler and standing in the way of real reform," says McGowan. "The only other dissenting voices are coming from banks and insurance companies who want to keep charging outrageous fees for their under-performing retirement planning services."
A poll released today (click here for poll results) by the AFL shows that Morton is out of step with Albertans when he claims they don't want or need CPP expansion - and that any reform should be left to private industry:
- 78 per cent don't buy his claim that Albertans have already made adequate arrangements for their retirement;
- 67 per cent don't buy the argument that banks and insurance companies should be chosen over CPP to run an expanded pension system; and
- 71 per cent say Morton and the Alberta government should get out of the way and allow changes to CPP.
The AFL also released a report by economist Hugh MacKenzie that shows Albertans need pension reform more than other Canadians. Titled It IS Broke - So Fix It!, the report finds that:
- Albertans are less likely to be covered by an employer pension plan;
- Albertans with pension coverage are likely to have inferior coverage compared to other Canadians, with only 11 per cent having a defined-benefit plan; and
- Only 38 per cent of Albertans contributed to an RRSP in 2008, and the median contribution was only $3,200 per year.
As part of the campaign, the AFL also launched a website to focus attention on the issue. On the site can be found information, documents and links dealing with issues of retirement insecurity and pension reform.
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Gil McGowan, President, Alberta Federation of Labour @ 780-218-9888 (cell)
A report by economist Hugh MacKenzie that shows Albertans need pension reform more than other Canadians.
In June, Alberta Finance Minister Ted Morton said the province will not support a proposed expansion of the Canada Pension Plan.
The Alberta Federation of Labour is launching a campaign with the Canadian Labour Congress that it hopes will change that position. AFL President Gil McGowan says Canadians face a looming retirement income crisis and expanding the Canada Pension Plan is the best way to deal with it.
The labour groups plan to lobby members of the legislature, set up a website and release a poll that suggests that most Albertans favour expanding the CPP.
McGowan says they hope Alberta will give up its opposition to improving the pension system before federal and provincial finance minister meet next month in Kananaskis.
iNew 880AM, Mon Nov 15 2010
November 2010: Better health and safety rules; pension reform; Parkland fall conference; Lakoff lecture highlights; stop Calgary Public Library cuts
- The AFL has released a 10-point plan on workplace health and safety (click here for the plan), calling for immediate action from the Alberta Minister of Employment and Immigration (click here for press release). "If simple and common-sense changes aren't made today, Alberta will return to the highest number of workplace fatalities in Canada," says AFL president Gil McGowan. The AFL delivered more than 2,500 signed postcards to the government calling for improved health and safety rules. For more information ...
- Canada is facing a pensions crisis and the situation in Alberta is worst than most of the country, with too many people facing a retirement of poverty and hardship after a lifetime of hard work. There is growing consensus about reforming the Canada Pension Plan, but the Alberta government, led by Finance Minister Ted Morton, is resisting. Join top Canadian pension experts Jon Kesselman, Canada Research Chair in Public Policy at Simon Fraser University, and Bernard Dussault, former chief actuary of the Canada Pension Plan, at an AFL summit to explore how we can all retire with dignity. For more details ...
- Join the Parkland Institute for its 14th annual fall conference, which features a lineup of speakers headed by Canada's most famous author, Margaret Atwood. The vision of Canada is changing, thanks to the efforts of the conservative and corporate elites. Military aggression has replaced peacekeeping. Global competition is in. The conference looks at the hopeful politics of retrieving Canadians' popular view of a country where social and environmental justice prevail. For full conference details ...
Get the message!
- Linguistics professor George Lakoff, former communications advisor to Barack Obama during his presidential campaign, gave a lecture to the AFL and guests on how to get the progressive message out. How you frame the debate determines how successful you will be. To hear highlights of his lecture ... To hear the lecture in full, contact us at firstname.lastname@example.org.
Join the campaign to stop library cuts
- Calgary Public Library is facing budget cuts that would reduce opening hours and mean job losses. A letter-writing campaign launched by library workers' union CUPE 1169 has already had an impact and the size of the looming cut has been reduced. Let's build on this success by stepping up the campaign. To join the campaign ...
November 5-7, 2010 - AB New Democratic Convention, Red Deer
November 13, 2010 - Notre Dame Des Bananes Fall Concert, Bonnie Doon Hall,
November 16, 2010 - AFL Lobby Day, Edmonton
November 18, 2010 - AFL Workshop - How the Temporary Worker Program is Impacting Alberta's Reputation
November 19-21, 2010 - Parkland Fall Conference, Edmonton
November 27, 2010 - AFL Pension Summit, Edmonton
December 5, 2010 - AFL Women's Committee Commemorative Brunch, Edmonton
Did you know ...
- In 1991, 15 per cent of the Alberta workforce (341,000 workers) was employed in the top four most dangerous occupations. In 2009, 22 per cent of Albertans (620,000 workers) were employed in the most dangerous occupations.
- Proportionately, Alberta has four times more people in resource-extraction industries - one of Canada's most dangerous industries - than the Canadian average.
- Workers in Alberta are more likely to die on the job than workers in other provinces. In 2008, there were 5.9 deaths per 100,000 workers in Alberta compared to the national average of 4.2 deaths per 100,000 workers.
October 2010: Pension reform; Lakoff lecture/workshop; health-care proposals; workplace injury and fatality records website
- More than three quarters of Canadians support increasing Canada Pension Plan benefits, according to a new national survey released today by Canadian Union of Public Employees and the Public Service Alliance of Canada. For more information ... To learn more about the campaign for pension reform and events being organized by the Alberta Federation of Labour and Canadian Labour Congress, go to ...
Why the right wins ... and how we can stop them
- Albertans have a long history of electing right-wing governments. This has seriously affected the quality of our public debate and hampered our efforts to unionize and represent workers. How can progressives slay this political giant? To find out how, the AFL is bringing in George Lakoff, the communications mastermind behind the U.S. presidential campaign of Barack Obama. For more details ...
Drop undemocratic changes to Alberta's health laws
- Friends of Medicare has launched a campaign to persuade Health Minister Gene Zwozdesky to abandon plans to change provincial health laws, after a legal opinion commissioned by the AFL said the proposals were "not consistent with a democratic society." For more information ...
Government's safety records website gets failing grade
- Alberta's new website offering workplace injury and fatality records may be well intentioned, but presents only a bewildering array of statistics and little useful information for workers, says the AFL. For more information ...
Support U of A janitors in struggle for justice
- A group of janitors at the University of Alberta is suing a cleaning company for tens of thousands of dollars, claiming that overtime money has not been paid. The janitors, many of whom are temporary foreign workers, say they have been threatened with deportation by their employer, University of Alberta contractor Bee Clean Building Maintenance. Show your support at an event at the University of Alberta, 4 p.m. to 6 p.m. on Tuesday, Oct. 19, Education Building Room 106, University of Alberta North Campus. For details of the event ... For information and to sign a pledge in support of the workers, go to http://www.j4jatuofa.org/
- October 25, 2010 - CLC Pension Campaign Lobby Training Session, Edmonton
- October 28/29, 2010 - George Lakoff Lecture/Workshop, Edmonton
- November 5-7, 2010 - AB New Democratic Convention, Red Deer
- November 16, 2010 - AFL Lobby Day, Edmonton
- November 19-21, 2010 - Parkland Fall Conference, Edmonton
- November 27, 2010 - AFL Pension Summit, Edmonton
- December 5, 2010 - AFL Women's Committee Commemorative Brunch, Edmonton
Did you know ...
An analysis by the AFL of Alberta government spending shows that it has cut expenditure on environmental monitoring, while spending on public relations has soared. The research revealed:
- 26% drop in spending on environmental monitoring, compliance, and enforcement. Alberta spent $27 million on monitoring, enforcement, and compliance programs in 2003. Budget 2010 projects Alberta Environment will spend $20 million this year.
- 54% increase in spending on public relations since 2003. The Communications line for Alberta Environment grew from $717,000 in 2003 to $1.1 million for 2010.
- 57% increase in spending by the Minister, Deputy Minister, and Communications from a combined total of $1.4 million in 2003 to a projected $2.2 million in 2010.