Thursday, February 18, 2010

Pension Time Bomb

Ugh I am getting so tired of the media reporting on the problems facing the Canada Pension Program as though it's all a surprise. I saw something 2-3 years ago about how my the time my generation is retiring, there will be massive problems. I also learned that in HIGH SCHOOL when we were learning how to read demographic charts by age, and then projecting what future models would look like when we were 30 and then 65. So if that was in my social studies textbook in about 1990, and I see tons of articles online dated over the past 10 years minimum, why do people act like it's a surprise now? Did they forget the reports in 2009, 2008, 2007, 2006, 2005... 2000, 1990...??? Like seriously. Get a grip people. Perhaps some members of the govt hope we are all idiots and 'forget' things easily, but you know you have been warned about this, you know it's been an approaching problem for many many years... so why act all shocked and dismayed NOW?

Here is a short list of articles talking about this 'time bomb' over the past several years. Perhaps CTV News should admit how many times THEY have reported on this same issue before their next broadcast acting like it's a new story just breaking headlines.

Time Bomb Threatens Pension System: Report (2000)
Retirement Time Bomb book (2005)
Some CAW paper listing that in 1995 Martin told Canadians not to worry that the aging population was a 'ticking time bomb' (2005)
Bolstering Canada's Pension System? (blog 2009)
Pensions Under Attack (book 2001)
Pension Time Bomb Explodes (2008)

And then there is this interesting opinion/speech that I found while searching... it talks part-way down the page about the MYTH of a demographic time bomb (dating this prior to 1998), and how it's about right-wing think-tanks whipping people into a panic.

Is it a myth if workers:retirees will be 2:1 in only 20 years? I learned about it in school, maybe not to the point of shooting down the pension system, but in the way that all of us could see with our very own eyes what could very well happen. Women having fewer children, which put less workers into the system 30 years down the road, but a very large group of new retirees along with an-ever-increasing group of older pensioners due to our lengthening life-spans. The charts were very funky and disturbing way back then, to my 17 yr old mind. But I can still see them in my head...


  1. Of course it is possible to fix the problem in a very realistic time frame, based on total government spending of @ 230 billion:

    I think the emphasis on protecting transfers is wrong headed, but that is because I don't see the idea of the State seizing wealth and property from the productive to give to political rent seekers and the non productive as being a proper role for the State.

    However, given political reality, cutting transfers to individuals would be electoral suicide, so about $61 billion is untouchable.

    We can still look at other areas like transfers to governments (especially governments with their own sources of revenue like offshore oil or hydro), which gives us another $46 billion to work with.

    Subsidies should be cut for another @ $30 billion

    Crown corporations should be cut as well, since that provides another $8 billion

    Adding that up, we can get $84 billion in cuts. Sustained for six years this would allow the entire national debt to be paid off, and if the program is sustained for 12 years then all unfunded liabilities (CPP, pensions, etc.) are also covered.

    Not included in this virtuous circle is the possibility of reductions in operating expenses due to the ending of so many programs, and of course the reduction of the $30 billion/year in debt payments. Real tax cuts can be made from the savings here, energizing the economy and in all likelyhood speeding up the entire process through increased tax revenues.

    Here is a real program to get behind: don't leave the debt to our grandchildren but pay it off before our children leave school!

  2. Thank you for your comment :) I agree - the spending has been out of control and that should not have been going on when they KNEW there could be big problems coming up. I shudder when I think of all the waste in various programs, and how all of that money could have been used to shore-up programs such as CPP for a very long time,,, but nope. It wasn't.

    On Friday I had another perfect example of wasteful spending at my workplace. I am going to end up saying something really nasty to a daycare parent one of these days and probably get myself in huge crap over it.

    Anyway a subsidized mom asked what her new fee was (she was recently cut off from welfare, who had been paying her portion for the past 3 years). My boss said "$84". It was 64 until the November fee rise. Anyway the mom rolled her eyes and said 'really? okay' but in a very grumpy tone.

    WTF? She already gets over $550 a MONTH for her son's daycare, paid for by tax payers through subsidy, and has done for the past 3 years. She also gets $100 a month in the form of UCCB... which is still MORE than the $84 she owes us. So in actual fact, she is still UP $16/month for childcare and is complaining about it. I cannot stand that and have to bite my tongue right off or I could find myself out of a job that I truly enjoy (the kids, not-so-much some of the parents lol).

    But she also got, for the past 3 years, housing allowance of about $500, $500 for welfare Core Needs, $300 for CCTB, free health care premiums, GST and Alberta Family Tax credits periodically throughout the year,,,, over $2000 per MONTH in benefits courtesy of Canadian/Alberta tax payers and sees fit to COMPLAIN about having to pay a measly $84 a month for full time registered child care in an approved and accredited center.

    My center was one of the first 150 in Alberta to become Accredited and passed with flying colours when this started about 5 years ago. We have very low staff turnover (as in ZERO lol), small family oriented center with great reviews - but she does not want to pay $84 out of her own pocket? Which she actually ISN'T PAYING, remember, because of UCCB. She is actually getting paid $16 a month right now to put her son into care, and yet she complains.

    That to me a fine example of wasteful spending - thousands of dollars per MONTH per PERSON involved in these programs, while those who have tried to work hard their whole lives may be kicked in the ass when it comes time to retire. My bf pays about $2000 a year into CPP right now (more in better years) but he may not see it. How is that fair at all? The whole thing is just retarded, in my opinion.



These are my views and opinions. If you don't agree or think I am sadly misguided, that is your view. Feel free to share your thoughts but I also reserve my right to moderate content (IE foul language, excessive flaming, etc).

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