Well, the Canadian federal election of 2015 is moving towards its inevitably exciting finish as the two left of centre parties hammer away at each other with essentially identical platforms, much to the delight of the Conservatives who have every opportunity to stay in power thanks to the Liberals and New Democrats splitting the centre-left vote, which accounts for 59% of the electorate.
You read that right. The Conservatives, with just 29% support in the latest poll, can take the country because the Liberals and New Democrats insist on pretending that they offer different platforms.
But that is only a side-note to this blog post, which is about saving for retirement in Canada and how this has become an election issue.
For a little background, all of the major political parties in Canada agree that Canadians are not doing enough to prepare for retirement. The latest survey of Canadian pension participation, released by the Feds in July of this year, shows that only 37.9% of Canadian workers are covered by any kind of workplace RPP (Registered Pension Plan). That means the other 62.1% of Canadian workers will need to rely more heavily on the Canada Pension Plan, the Quebec Pension Plan, Old Age Security payments, and personal savings.
Government studies show that workers who are not in RPPs generally end up working longer, face higher rates of poverty, and naturally have less financial security in old age. As a result, both federal and provincial governments are actively looking for ways to encourage or mandate Canadians to save more during their working years.
The ruling Progressive Conservative party, which has been in power for a decade, has made their philosophy known as they have taken steps over the past ten years to further their vision of encouraging the private sector to create savings vehicles and then gently nudging Canadians to take advantage of these. You can read our fairly comprehensive blog post on the topic BY CLICKING HERE.
Now both the Liberals and New Democrats are taking aim at the Conservative plans by promising to look at ways to expand the Quebec and Canada Pension Plans considerably. Their belief is that the “private sector” approach is simply not working, and that Canadians need more than a “gentle nudge” to ensure that they save sufficiently for retirement.
As usual, there is virtually no difference between the Liberal and New Democrat positions on the topic. Liberal leader Justin Trudeau promises to engage the provincial leaders in talks about how to address the problem within 90 days of taking office (if elected). Tom Mulcair of the New Democrats has promised to convene a First Ministers conference on pensions within 180 days of being elected. Stephen Harper, meanwhile, says that any effort to expand the Canada Pension Plan is a terrible idea because it burdens employers with making additional matching contributions, which amounts to a job-killing tax, in his view.
Pensions are an incredibly important topic for everyone and are naturally on the minds of Baby Boomers (who do most of the voting in any election), so it is good to see that our political leaders are openly debating the issue and forcing Canadians to give some thought to how they will live in retirement. Now it is up to the voters to decide which party to entrust with the task of boosting retirement savings for Canadians.