Stock Market Pension Plan is a Tory Scam

The latest brutal assault on the social wage is Ottawa’s reversal on the Canada Pension Plan. Instead of enhancing the CPP, which federal Finance Minister Jim Flaherty promised to do when he met with his provincial counterparts in Prince Edward Island last summer, the Tories are pushing a private sector scheme.

Leaning heavily on the capitalist economic crisis as a convenient crutch, Prime Minister Stephen Harper said “Now is not the time for CPP premium increases.” Does Harper appreciate the cruel irony of asking impecunious pensioners to invest in the stock market which had three meltdowns in 15 years (1997, 2002 and 2008)?

The CPP, which provides a guaranteed benefit to all seniors, should be increased immediately. Why? Because…

  1. It is impossible to live on a basic pension of $11,200 a year.

  2. Sixty per cent of workers have no workplace pension.

  3. One-third of Canadians between the ages of 24 and 64 have no personal retirement savings.

  4. Only one in four taxpayers put any money into a Registered Retirement Savings Plan in 2008. After 25 years of stagnant or declining wages, it is hardly surprising how difficult it is for people to save on their own.

  5. 1.6 million Canadian seniors today live in poverty, with incomes below $16,000 a year.

Presently, the Canadian Labour Congress is campaigning for a doubling of Canada and Quebec Pension Plan benefits, to be phased in by small premium increases over seven years. The resulting $22,400 annual pension income would be an improvement, but still woefully inadequate, especially seven years from now, and beyond.

The CPP, which hasn’t been expanded since its inception 45 years ago, should be tripled, and the main burden of the contribution increase should be borne by big business and the rich. Yes, the class that has gained the most from two decades of corporate tax cuts, and that appropriated more than 30 per cent of the extra income generated during the so-called boom years (according to Linda McQuaig and Neil Brook’s recent book “The Trouble with Billionaires”), should pay for this and other pressing social needs.

Naturally, any increase in CPP benefits is opposed by the banks, financial institutions and insurance companies which have profited enormously by selling RRSPs.

Enter the Conservative federal government, and their political cousins in the province of Alberta. They propose a new Pooled Registered Pension Plan – a voluntary scheme to be administered by the financial industry. Small and large firms could use this to offer private pensions to their employees, who would pay into it, but get a pension based only on market performance. It would spread a growing disease, the focus of a bitter labour struggle at Vale Inco, and now at Stelco, in which management seeks to replace “defined benefits” with “defined contributions”. The latter embodies the possibility of little or no pension for the entrapped workers.

Ontario Federation of Labour President Sid Ryan, who was among two dozen protesters who occupied Finance Minister Flaherty’s office in Whitby, Ontario on December 19, called the Tory scheme “a gimmick to get the issue of pensions off the front pages.” Ryan was all too kind.

Actually, it is a wretched scam designed to rip off the working class and further subsidize financial Capital. It is a case of kicking workers while we’re down.

The appropriate answer to the conniving Tories, and to the more subtle but equally venal Liberals, is for workers to stand up and fight back. General strikes from Portugal to Greece, powerful and unifying actions scarcely reported in the North American media, show the way to defend pensions and other threatened social gains. -Barry Weisleder

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