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CLC President Ken Georgetti speaks to the BC Pension Forum “The Future of Retirement Security for British Columbians: Tools for Change”

Presented by Ken Georgetti on Friday, 2 March 2012

(Check against delivery)

Sisters and Brothers, I am pleased to bring you greetings of solidarity on behalf of all Officers and the 3.3 million workers who are members of the Canadian Labour Congress.

I want to thank SHARE for putting on this important event.

And thanks to Bruce, Laura and Brian for their participation today.

Truly, the issue of how we – as a society – can ensure that all Canadians can retire with dignity and security is one of the most important social policy questions of our time.

And it will be our responsibility to win retirement security for future generations, just as previous generations fought for Medicare, for employment insurance and for the right to join a union.

We have a very simple choice to make on retirement security – a stark choice.

Prime Minister Stephen Harper has given us one option – work longer, work till you are 67 – or perhaps even work until you drop dead in your job.

But that’s no option for any of us.

It’s not an option for the hard-working Canadians who built our country and deserve the right to enjoy their retirement years.

But the Canadian Labour Congress has given our country another option – and a much better option.

And we are glad that the Prime Minister has given us the opportunity to debate it in public and on the front pages.

Here’s what we say: improve the Canada Pension Plan over the next few years to double the retirement benefits for all Canadians.

Make CPP work the way it should – so that no Canadian lives in fear – fear of what should be their golden years.

Mr. Harper would have you believe the choice is either his way…or no way.

I believe the choice is between the wrong way…and the right way.

Let’s talk about the differences, because they are enormous and because your future – all of our futures – depend on making the right choice.

The Conservative solution is to make Canadians work until they are 67 years old – two additional years – in order to collect Old Age Security payments.

And the Conservatives only offer another private sector solution to provide retirement income – the Pooled Registered Pension Plans.

But PRPPs are only another version of the failed concept of Registered Retirement Savings Plans.

Most Canadians have rejected RRSPs – and a new Royal Bank report says RRSP contributions are on track to decline to the lowest percentage of disposable income since the 1970s.

There is, in fact, more than half a trillion dollars in unused RRSP room that Canadians could have purchased – but obviously could either not afford to buy, or felt it was a poor investment, given recent returns and high management fees.

The RRSP participation rate has been in steady decline since 1997, when it peaked at 32.6 per cent – just one-third of Canadians.

I safely predict PRPPs will be even less successful, no matter how much they are hyped by the financial institutions, because those very banks and insurance companies are the true beneficiaries, rather than retirees.

The best answer is – and always has been – defined benefit pension plans.

Unfortunately, most Canadians don’t have that opportunity and such plans are under severe attack, as you know.

Meanwhile, the cost of increasing the OAS threshold age to 67 is an economic disaster in the making for the provinces.

The federal government will merely be downloading the cost of supporting seniors – who will need an additional 2 years of social assistance paid for by the provinces before qualifying for OAS at the age of 67.

This will cost provinces an estimated $425 million a year.

Here in British Columbia, the additional costs will be about $34 million a year.

And that’s just the financial cost.

The real burden will be having even more poor seniors struggling below the poverty line.

What a tragic commentary on our government’s priorities.

There’s always money for yet more corporate tax cuts – $13 billion this year, and all of it borrowed.

Or for military expenditures like the F-35s – or the wasted G-20 boondoggle in Conservative ridings – but not enough for our elders.

It’s shameful – and it doesn’t have to be that way.

Briefly, the Canadian Labour Congress plan is the positive alternative.

Expanding the CPP has been strongly endorsed by the Canadian Association of Retired Persons, by mayors and councillors across Canada, by most provinces and by public opinion.

An Ipsos Reid poll last month showed 74 per cent of Canadians oppose raising the OAS eligibility age.

And our own past polling by Environics found that 76% of Canadians fully support increasing CPP benefits.

The reasons are obvious.

If we phase in a small premium increase over 7 years, it would result in a doubling of maximum benefits – to $1,973 a month.

That would raise the basic pension floor for all workers from a poverty level of $12,000 a year to a far more liveable $24,000.

What’s more, the Canada Pension Plan is universal, it’s portable – it goes with you, not your job – and it covers 93% of workers.

The CPP is also safe, secure, indexed to inflation and its management costs are lower than the exorbitant rates charged by private financial institutions.

It not only meets the needs of workers who don’t have a pension plan or RRSPs, it also provides a better retirement base for those of us who do have pensions.

With the CLC plan, a worker who is 28 today and works full-time from now until retirement at age 65 – that means 37 years of expanded contributions – would earn a monthly CPP payment of about $1,772.

But under the existing CPP without any improvements, the same worker's monthly CPP payment would only be about $886.

That’s a huge difference – our proposal literally doubles retirement income.

Is it too expensive for workers? No.

For a worker earning $47,200 or more per year, the cost of doubling future CPP benefits works out to about just 9 cents an hour, or only $3.60 a week.

That's less than the cost of a newspaper subscription – and worth a whole lot more.

And the CLC plan still helps older workers who are approaching retirement age.

With our plan, a worker who is 58 today and works full-time from now until retirement at age 65 would get an extra $160 a month in CPP – that will make a real difference.

So, given that this all makes good common sense, guess what?

Federal Finance Minister Jim Flaherty – who initially supported an expanded CPP – changed his mind.

The big financial institutions got to Flaherty and some provinces – just when we were close to a breakthrough.

But their strong opposition only means one thing – we are on the right track!

I urge you to join with us in our campaign to improve the Canada Pension Plan and to change retirement security for the better forever!

We didn’t win Medicare without a fight and we can’t get a better CPP without one either.

So let’s get to work – we have a job to do before we can retire!

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