Only thirty-three percent of Albertans are covered by a workplace pension plan, a rate below the national average. And with the number of retirees set to spike as the baby boomers leave the workforce, pressure on the Canada Pension Plan is growing.
Federal Finance Minister Jim Flaherty wants to expand Canada's pension strategy, but his Alberta counterpart says our province would prefer to help Albertans save on their own.
When you want to retire, will you have enough cash? Or do Albertans need a retirement boost? And should that boost come from government?
Joining us for the debate is Gil McGowan, president of the Alberta Federation of Labour, and Alan Caplan, a retired financial planner and personal finance columnist with the Edmonton Sun.Federation.
Alberta Primetime, June 29, 2010
See the debate here:
Gov't gains critical support for CPP hike: Alberta among minority of provinces opposed to higher premiums
Federal and provincial finance ministers have rallied around a mandatory, modest and gradual expansion of the Canada Pension Plan as the best route for fattening Canadians' retirement incomes.
Finance Minister Jim Flaherty said Monday a solid majority of the provincial ministers have endorsed the idea of increasing CPP contributions from employers and employees to boost the value of the benefits when they retire.
"We have a clear direction," Flaherty told a news conference following a meeting with his provincial and territorial counterparts in Prince Edward Island. "I think this is a significant step forward."
He acknowledged support for the direction was not unanimous, but indicated he is optimistic there would be enough provincial backing to make it happen. Changes to the CPP would require the support of two-thirds of the provinces and two-thirds of the population.
"We were not unanimous, but certainly the substantive majority view was that we should proceed," Flaherty said.
Senior officials were charged with working out the details and reporting their findings to a federal-provincial finance ministers' meeting in the late fall.
The next step will be to get an agreement on how much and how quickly to raise CPP contributions. The average CPP benefit is approximately $6,000 a year. The maximum is about $10,000.
Alberta Finance Minister Ted Morton has made no secret of his strong opposition to imposing what he calls a new "tax" on small business by upping the CPP contribution levels.
The Canadian Federation of Independent Business also has denounced the proposal as a job killer.
"It takes a solution that applies to all Canadian workers to solve a problem that only applies to a small cohort of workers," Morton said. "We're using a sledgehammer to kill a mosquito."
But others disagree. The Alberta Federation of Labour took out an ad in a P.E.I. newspaper urging Morton's counterparts to ignore his position.
"Don't allow Alberta's finance minister to derail pension reform for all Canadians," AFL President Gil McGowan said in the letter. "Please support reform that focuses on expansion of Canada s most efficient, economical and portable pension vehicle -- the CPP."
The AFL argues that fewer Albertans are covered by private pension plans than the national average.
Ken Georgetti, president of the Canadian Labour Congress, cheered the decision to embrace the CPP as the best vehicle to bolster retirement savings.
Noting that as many as six in 10 workers don't have workplace pensions, Georgetti said, the federal and provincial governments have no choice but to act "unless they want the next generation to pay for our mistakes."
Nova Scotia Finance Minister Graham Steele held back his support, saying he wanted to check with his cabinet colleagues.
Still, the political momentum has clearly shifted in favour of enriching the CPP, a plan that covers almost all Canadian workers. Quebec, which administers the parallel Quebec Pension Plan, signalled it would not put up any roadblocks.
Flaherty told reporters the ministers had decided to "take off the table" the idea of a voluntary, government-sponsored plan to complement the CPP, a proposal that had enjoyed significant provincial support as recently as last December. The federal Liberals also advocate a voluntary supplemental plan.
The decision to pursue an enhanced CPP -- a proposal consistently advocated by labour unions and the federal NDP -- was first floated last week by Flaherty and Ontario Finance Minister Dwight Duncan.
The CLC is among those pushing for a gradual doubling of contributions to ensure a doubling of the benefits upon retirement.
Although Flaherty and many provincial officials have already dismissed that formula as too costly for Canadians and their employers, Georgetti said he will use the coming months to persuade them they are wrong.Debate over the adequacy of Canadians' retirement income has picked up in the last year after the economic recession exposed fault lines in the country's pension system.
Edmonton Journal, Tues Jun 15 2010
Byline: Norma Greenaway
One Alberta labour group says it doesn't believe the provincial finance minister when it comes to CPP.
In a letter published in a Charlottetown newspaper Sunday, Gil McGowan with the Alberta Federation of Labour says Ted Morton does not speak for most Albertans, who want pension reform.
He says only 33 per cent of Albertans are covered by a pension plan, less than the national rate of 38 per cent.
660News, Mon Jun 14 2010
Albertans want pension reform, despite what the province's finance minister might say, according to the president of the Alberta Federation of Labour.
On Sunday, Gil McGowan wrote a letter that ran in a Charlottetown, PEI newspaper, where Canada's finance ministers are meeting to discuss pensions.
In it, he argued that Alberta's finance minister, Ted Morton, does not speak for the majority of the province with his "anti-CPP rhetoric."
"Don't believe him," McGowan wrote. "The truth is Albertans have less retirement security than many other Canadians. While only 38% of workers in Canada are covered by workplace pension plans, that number is only 33% in Alberta."
He went on to point out that Morton's predecessor, Iris Evans, has said the government needs to play a role in addressing problems with pensions, possibly even expanding the CPP.
"Don't allow Alberta's finance minister to derail pension reform for all Canadians," McGowan said. "Please support reform that focuses on expansion of Canada's most efficient, economical and portable pension vehicle - the CPP."
Morton has argued that Albertans don't support changes to Canada's pension system because "it is not a targeted response to the issue at hand.
"Rather it is an overreaction," he said recently.
He also said CPP reform might benefit the "significant minority" who aren't saving enough for retirement, but it would give "additional and unnecessary benefits" to those who have saved.
Provincial and territorial finance ministers are slated to meet in PEI Monday to discuss pension reform and other issues.
Federal Finance Minister Jim Flaherty has proposed two key changes to CPP, including increasing benefits and allowing financial institutions to offer defined contribution registered pension plans.
In a letter he urged his provincial counterparts to support his plan.Edmonton Sun, Sun Jun 13 2010
Byline: Alyssa Noel
Ted Morton doesn’t speak for Albertans on pension reform: Don’t allow improvements to be derailed, finance ministers warned
In an open letter in today's Guardian newspaper in Charlottetown, P.E.I, where finance ministers are meeting to discuss Canada's pension crisis, the Alberta Federation of Labour (AFL) says that Morton does not speak for the majority of Albertans.
In the letter, AFL President Gil McGowan says that Morton will probably tell the other finance ministers that ordinary Albertans oppose reform to the nation's pension system.
"Don't believe him," McGowan says in the letter. "The truth is Albertans have less retirement security than many other Canadians. While only 38 per cent of workers in Canada are covered by workplace pension plans, that number is only 33 per cent in Alberta. Individual Albertans also have smaller nest eggs as a proportion of their incomes than most other Canadians. As a result, if there is any province where working people would benefit most from CPP expansion, it's Alberta."
Morton is out of step with the vast majority of Albertans and Canadians with his anti-CPP rhetoric. His views are not even shared by his own caucus. Only six months ago, his predecessor, former Alberta Finance Minister Iris Evans, acknowledged that there is a serious problem with pensions and said government has an important role to play in addressing that problem. She even said that all ideas should be considered - including CPP expansion.
"Don't allow Alberta's finance minister to derail pension reform for all Canadians," McGowan says in the letter. "Please support reform that focuses on expansion of Canada's most efficient, economical and portable pension vehicle - the CPP."
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Gil McGowan, President, Alberta Federation of Labour, 780-218-9888
April 2010: Auditor General Report on Occupational Health and Safety; Temporary Foreign Workers; Pensions; Phone now to save union jobs
Lives of workers put at risk by government
- The government's shocking failure to enforce its own workplace safety laws is putting thousands of workers at risk, according to a new report from the Auditor General. Not only have companies that have violated the Occupational Health and Safety Act been allowed to continue without penalty, some have been awarded Certificates of Recognition that earn them WCB discounts and help them win contracts. The AFL has long fought for stronger health and safety standards and enforcement. It now calls on the government to quickly implement all recommendations made by the Auditor General, including the naming of those companies that are repeat offenders. Workers have a right to know whether their workplace is safe or not. Go to Call to Action - Report of the Alberta Auditor General for details or to the AFL release.
It's time to stop the exploitation of vulnerable temporary foreign workers
- The vast majority of temporary foreign workers in Alberta have been charged sometimes illegal fees ranging from $3,000 to $20,000 by "employment agencies," but the government of Alberta has failed to prosecute these agencies, says AFL's Temporary Foreign Worker Advocate. The government is now seeking feedback on changing legislation governing these agencies. We have until April 30 to tell them that we don't support exploitation. For more details ...
Alberta abandons leadership role in tackling crisis on pensions
- Finance Minister Ted Morton has played down the seriousness of the pensions crisis facing Canadians, reversing the position taken earlier by the Alberta government. Rather than pushing for a much-needed boost to the pensions system, Morton claims there is no crisis and no need for urgent action. "It looks like the government's commitment to push for meaningful changes is starting to evaporate," says Gil McGowan, president of the AFL. For more information ...
Alberta continues to shed jobs while other provinces recover
- The latest figures from Statistics Canada reveal that unemployment in Alberta has risen to 7.5 per cent, its highest level since 1996 - and it's the only province that continues to lose jobs. There are 87,200 fewer Albertans working in full-time jobs today than there were at the top of the pre-recession boom in October 2008. While other provinces have embarked on stimulus programs to boost their economy, the Alberta government has chosen to stand idly by and watch jobs disappear. For details ...
Phone now to save union jobs
- The Yellow Pages Group has decided it will no longer print and distribute White Pages phone books. This may mean the loss of 42 jobs of members of the Communications, Energy and Paperworkers Union at World Color in Edmonton, where the directories are printed. It's also bad news for seniors who may not have access to online directories. But there is a chance to reverse the decision and save jobs. If you want White Pages delivered to homes and offices, call 1-877-909-9356. For more details ...
2010 AFL Kids' Camp
August 9 - 13, 2010
16th Annual AFL Kids' Camp, August 9 to 13, 2010. The theme for this year's camp is "Health and Safety: Not Just for Adults." The camp is open to children of all AFL affiliates.Camper Registration Form and Union Donations and Volunteer Form
Deadline for registration is June 18, 2010.
Did you know ...
- That there were 166 occupational fatalities in Alberta in 2008, compared to 154 the previous year;
- That 63 companies have failed to comply with Occupational Health and Safety orders after one year or more;
- That 31,000 employees work for those companies;
- That half of those companies that consistently fail to comply with OHS orders still hold valid Certificates of Recognition; andThat not one of those companies has been named by the Alberta government.
Morton’s remarks suggest Alberta is abandoning its leadership role in the search for solutions to Canada’s looming retirement income crisis
CALGARY -- Is the Alberta government stepping back from earlier promises to lead a nationwide fight to improve Canada's system for providing retirement income for seniors?
Based on remarks made this morning by Ted Morton, Alberta's new finance minister, that seems to be what's happening.
"Pension reform has risen to the top of the political agenda across the country," says Alberta Federation of Labour president Gil McGowan. "And the Alberta government can take a lot of credit for putting it there. But, based on the minister's comments this morning, it looks like the Stelmach government's commitment to push for meaningful changes is starting to evaporate."
In his opening remarks to the National Retirement Income Summit, being hosted today by the University of Calgary's School of Public Policy, Morton downplayed the seriousness of concerns being raised about the inadequacy of retirement savings and retirement income for millions of Canadians.
Among other things, Morton said that if seniors find themselves without adequate retirement income, they should simply continue working or consider selling off or re-mortgaging major assets like their homes.
Morton also said the Alberta government would not support an expansion of the Canada Pension Plan(CPP) - a reform that is supported by numerous seniors groups and labour groups and which is being given serious consideration by several provinces.
"The previous finance minister said that all options were on the table, but clearly that's no longer the case," said McGowan, who is also attending the summit in Calgary. "That's more than a little disappointing, especially considering the fact that an on-line public consultation process aimed at getting the views of ordinary Albertans doesn't wrap up until the end of the week."
McGowan says he was particularly disappointed in the Minister's suggestion that the private investment industry should be given another ten years to find ways to help Albertans save more appropriately for retirement.
"The investment industry has already had 30 years to prove that they have the solutions Canadians need - and they've failed miserably," said McGowan. "High fees, risky products, questionable advice, and grossly inadequate savings - that's what an over-reliance on private RRSPs has brought us. The minister needs to take his ideological blinkers off and become a little more open-minded about low-cost public solutions like expanding the CPP."
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Gil McGowan, President, AFL @ 780-483-3021 or 780-218-9888 (cell)
Andrew Kohsel can testify on multiple fronts to a growing problem plaguing many of today's seniors -- and will soon spread to a large swath of baby boomers.
As the head of a Calgary seniors group and part-time financial adviser in his retirement, he knows that while the ranks of greying Canadians are growing, their bank accounts aren't.
Only 38 per cent of workers in Canada are covered by a pension plan, and only 33 per cent in Alberta -- one of the worst ratios in the country, according to provincial government data.
What's more, only two in 10 employees in the private sector have a company pension to help pay for expenses in their golden years. At the same time, the number of retirees is expected to swell as more baby boomers stop working.
The numbers don't add up. "There's a lot of people who aren't going to make it," Kohsel, president of the Calgary-based Coalition of Seniors Advocates, said of the plight facing some of the group's members.
"There's people that don't have enough money to put food on their shelves."
Indeed, insufficient retirement savings and lack of pension plans for millions of Canadians is the dilemma facing federal Finance Minister Jim Flaherty and some of his provincial colleagues, who are in Calgary for the two-day National Retirement Income Summit that starts today.
Conference participants will examine the financial challenges facing retiring Canadians, as well as how to reform the country's pension system and encourage more people to save for their golden years.
"The lower number in Alberta that actually have a pension plan is of concern," said Alberta Tory MP Ted Menzies, the parliamentary secretary to Flaherty and Ottawa's point man on pensions.
He cautioned, though, that federal and provincial governments must not adopt knee-jerk reforms that could cripple the current system.
"There isn't the immediate panic that we have to fix this tomorrow," Menzies added. "Let's make sure we fix it right, whatever we do."
Alberta Finance Minister Ted Morton, who is scheduled to speak at the conference, wasn't available for an interview.
Wild Rose Country has been seeking a pan-Canadian voluntary pension plan to supplement the Canada Pension Plan, but failing that, is prepared to establish a regional scheme with B.C. and possibly Saskatchewan.
The province has launched its own public consultation, seeking input on how to strengthen the retirement income system, including whether to adopt a voluntary, defined-contribution plan and boost payments to CPP, among other options.
Noel Somerville, chairman of a seniors task force for Public Interest Alberta, said the issue of retirement income should be a growing concern. Many Albertans don't understand the financial pressures once they retire, such as additional costs of health care often covered by employee benefit plans, he said.
"Many people find themselves with inadequate savings," Somerville said. "We are very concerned about the baby boomers who aren't ready for retirement."
The seniors task force is worried about the limited number of workplaces offering pensions, and disappearance of defined-benefit plans in favour of defined-contribution. The group wants a national supplemental plan that establishes uniformity across the country rather than scattered regional plans.
Kohsel and his Calgary-based COSA group, meanwhile, want the province to adopt a mandatory, defined-benefit plan that forces people to save for retirement and promises a specified monthly benefit.
"No matter how hard you try to do this voluntarily, there will be a hell of a lot of people who won't do it," he said.
The numbers suggest Canada's savings system certainly needs reform. Statistics Canada reviews in recent years of wealth, debt and savings have shown nearly one-third of working Canadians had no retirement savings, while many of the rest weren't socking away enough cash.
At the same time, the country's population is quickly aging. By 2031, about a quarter of Canadians will be older than 65, compared with 13 per cent in 2005, the federal agency forecasts.
Flaherty's stop in Calgary is part of the federal government's cross-country consultation tour. Public input is being sought on proposals such as fattening Canadians' retirement income through a mandatory enrichment of the CPP and a voluntary pension scheme to supplement the public system.
The results of the national consultations will be debated by federal and provincial finance ministers in either May or June, and then taken to individual cabinets for further discussion. No timetable has been set for a final decision, and the provinces have the option of proceeding on their own.
However, Menzies believes provinces are now stepping back from adopting a pan-Canadian or regional supplemental plan, instead focusing their efforts on other priorities and looking at alternatives.
"They've really backed off," Menzies said about the push from various provinces. "(Morton) shares our concern, but it will be interesting to see how hard he wants to push this."
Alberta's Official Opposition, though, is joining seniors groups in demanding the provincial and federal governments act quickly and adopt a mandatory supplemental plan.
"They definitely have to do something," said Alberta Liberal finance critic Hugh MacDonald. "When you see how many workers in the private sector don't have pensions, it should be made mandatory."
MacDonald stresses that any supplemental plan must be portable.
Alberta Federation of Labour president Gil McGowan said he's encouraged by the recent push to address what he believes is a looming pension crisis.
However, he argued a series of policy changes are needed to ensure future generations have appropriate retirement savings, including doubling CPP benefits over the next 15 years; making any supplemental plan mandatory; and introducing a federal pension insurance system.
"Many workers, especially when they're young, don't fully understand the importance of setting money aside for themselves for their retirement," McGowan said.
Calgary Herald, Mon Apr 12 2010
Byline: Jason Fekete