Change in the CPP: coming to people near you?

The Globe and Mail reported earlier this week that the Federal Finance Minister, Jim Flaherty, agreed with his provincial ministerial colleagues to consider a modest expansion of the CPP this June. It didn’t happen.

The author of the article, Michael Wolfson, added that a study – also released this week, by the Canadian Institute for Research on Public Policy with projections by Mr. Wolfson – suggests that half of Canadian middle-income earners over 40 years of age will see a significant decline in their standard of living after retirement.

Meanwhile, the federal government continues to say that Canadians are not saving enough for their retirement.

This conclusion is hardly new. One concern is that the government believes any new retirement benefits (i.e., increased CPP benefits) must be funded (i.e., met by increased CPP contributions, thus likely to take a long time to phase in).

Mr. Wolfson discusses several potential solutions, including an increase in CPP age eligibility, coupled with modest increases in contributions. One of his main points is that there are several ways to increase CPP benefits without harming our economy, while making the lives of many Canadians more enjoyable and affordable.

That kind of situation will, in my view, actually benefit the economy. Our country and our economy have nothing to gain by creating a group of retired people who can’t afford to live.

This ad ran in the Richmond News on July 19, 2013.