Labour movement is critical of the proposal because the supplemental plan wouldn't be mandatory and doesn't require employers to match employee contributions.
(16 September 2009) – Canada's three westernmost premiers pledged to push ahead next year with developing a regional pension plan if talks to create a national program fail.
In Calgary for the latest meeting of political leaders from Alberta, British Columbia and Saskatchewan, on September 11, the premiers noted only two in 10 employees in the private sector have a workplace pension to contribute to their retirement income in their senior years. This is taking place while the ranks of retirees are expected to grow as more baby boomers now in their 50s stop working.
"Being a baby boom premier, I'm a little concerned that about a third of our population has comfortable savings," Alberta Premier Ed Stelmach said. Another third are "close to being comfortable, but last year certainly depleted a lot of their savings," he added.
"But there's a third that have no savings and will have to rely on just the one pension plan, the Canadian Pension Plan."
Creating a regional voluntary pension program was one of several commitments reached Friday between the three provinces, which all remain in the grips of a global recession that has eroded jobs, export markets and government revenues.
The supplementary pension plan was first proposed between British Columbia and Alberta as a recommendation from the Joint Expert Panel on Pension Standards both governments established in late 2007. Saskatchewan government recently announced its support to join in on the inter-provincial plan.
The issue of retirement savings has taken on heightened political importance since the economic downturn shrunk many people's retirement savings and left several private-sector pension plans on unstable footing.
Alberta MP Ted Menzies, parliamentary secretary to the finance minister, is chairing a provincial-federal task force on pensions and other savings options, comparing how Canadians stack up with the rest of the world. The task force is slated to finish its work by the next finance ministers meeting in December.
Campbell stressed if the September meeting doesn't yield action, the three western provinces will push ahead with their own plan. "We've got to get on with this," Campbell said. "If they're not ready to move, we'll be moving in 2010 to try and make sure this gets in place as quickly as possible."
The pension plan the three Premiers are proposing would be a voluntary. The labour movement in each of the three provinces has been critical of the proposal because the supplemental pension plan wouldn't be mandatory and doesn't require employers to match employee contributions.
The Federations of Labour from the western provinces have called on their respective premiers to use their clout to call for a national pension summit at which all stakeholders could debate fundamental pension reforms - like the dramatic expansion of the existing Canada Pension Plan (CPP). A growing chorus from labour, business and academia now see the CPP - which provides a defined benefit - as the best and easiest vehicle for reform.
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