Saturday, May 23, 2009

“Mr. Harper left his balls out West….”

GM_logoThe Globe and Mail reports that the GM/CAW agreement will, in fact, result in provincial and federal taxpayers forking over billions to protect the pensions of GM retirees. This in spite of Harper’s and Clement’s repeated assurances to the contrary.

In decrying the blatant about-face, Kevin Gaudet, federal director for the Canadian  Taxpayers Federation, provides one of the best quotes I’ve seen in a while, stating, “Mr. Harper left his balls out West when it comes to taking a principle stand…”. Truer words were never spoken.

I presented my thoughts on bailing out any pension plans in the following letter to the editor, published by the Ottawa Citizen April 27. It now appears more relevant than ever.

“While I certainly sympathise with retirees from Nortel, Chrysler, GM and others who are concerned that their retirement incomes will be impacted by the current state of their companies and the recession, I must protest in the strongest possible terms any government action to guarantee 100% payouts from those defined pension plans.

I am one of the vast majority of Canadians who never had a pension plan, who never had an employer making matching contributions (or better) to my retirement funds. Now retired, what I have to live on I saved from my own earnings. And over the past 2 ½ years, thanks to Jim Flaherty’s income trust fiasco and now the global recession, my retirement fund has slipped to slightly better than 50% of where it was projected to be today. To put it in even plainer terms, my income is now half of what I had expected. As a consequence many plans have been cancelled or deferred indefinitely, and total retirement remains elusive as part-time work supplements my modest retirement income.

There are many, many of us in similar situations, and to ask us to now use our tax dollars to augment the pension incomes of others is neither fair nor appropriate.

By all means provide support to those workers who might lose their entire company pension, but under no circumstances should we be topping up pensions that have unfortunately suffered a similar degradation in value as the rest of us have experienced.”


CAITI said...

Great POINT!!!

Which begs the question:

Speaking of leaders without “balls”, does Ignatieff have the balls to expose Harper’s lies about tax leakage, and confront Bay Street’s true power brokers and their Flaherty induced rip-off of average Canadians? Or is their something rotten in Ottawa? In Canada? In our democracy at large?

Anonymous said...

"I am one of the vast majority of Canadians who never had a pension plan"

Until the 1990's the vast majority of Canadians were invested in registered pension plans, so it's factual wrong to say that "the vast majority of Canadians" have "never had a pension plan". I can't find Canadian numbers off hand, but in the US the numbers went from 80% in 1985 to 36% in 2000.

All of this is a great explanation for why we shouldn't have ditched defined benefit pension plans and should move back toward some sort system of a similar system. The level of risk in individual investment is just not appropriate for most people. Allowing people to invest additional money in the CPP fund through optional private accounts would be a good start.

Canajun said...

Anonymous -

According to Stats Can, "the
percentage of paid workers belonging to RPPs continued to fall; between 1991 and 1999, coverage slipped from 45% to 41%."

But that's only paid workers in an employer-employee relationship. If you include self-employed workers, the percentages drop to 36% and 33% respectively.

So by my estimation, for the last 20 years at least, 2/3 of the labour force have not had a defined pension plan.