Pennies for a pension plan.

Did we all forget how conservative Liberal Finance Minister Bill Morneau can be? As MP from one of the most conservative electoral districts in Toronto, he is considered a Member from Bay Street, not Main Street. He proved it for all to see when he bargained improvements in the Canada Pension Plan down to the lowest common denominator. And what made it the complete farce was how Ontario’s finance minister cut and ran, after letting a planned, stronger Ontario supplemental plan be gutted by cheapskates.

Sure Morneau won provincial approvals. It was made cheap so the provincial finance ministers could easily agree. Of course Quebec stood back but they will probably have the Quebec Pension Plan provide Quebecers with the same pennies as the rest. Manitoba’s new finance minister had to go home to have the deal checked by mathematicians.

But the Ontario Liberal government got what it wanted. The Ontario Liberals were faced with heavy up-front costs to duplicate the Canada Pension Plan structure and proceed with the Ontario supplemental plan. The idea all along was to transfer the plan to the federal government when the time was right. With the Trudeau government in power in Ottawa the way was clear to toss the ball to the feds.

But Ontario retirees in the future will have to wait longer for less. Forgetting the present retirees who are watching their pensions eaten away by inflationary heating, eating and investment-defeating markets is the hallmark of the Wynne government.

And you can guess who the real cheapskates were at the negotiating table. It was British Columbia and Saskatchewan who kept complaining that their provinces could not afford any increase in fees or payouts. It is hardly that these finance ministers were worried about the needs of their citizens. They were just giving the usual knee-jerk conservative reactions. It was the same as the federal Conservatives who claim that Morneau and the provincial finance ministers have taken a drastic step that they will come to regret.

The truth is that Canada is behind most advanced countries in spending just over five per cent of gross domestic product on public pension funding. The average spending of Organization for Economic Co-operation and Development countries is around 9.5 per cent of GDP.

Bill Morneau will expect kudos at the next cabinet meeting on how fast he moved on winning acceptance of his plan. Actually the speed was all a favour to the Ontario government which needed to get to work if it was going to have to go it alone.

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Copyright 2016 © Peter Lowry

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