In the dying days of a third mandate, federal Finance Minister Joe Oliver is about to spend the last summer before the October election consulting the provinces on a public pension reform that all governments, including his own, dismissed as unworkable five years ago.
When the idea of allowing Canadians to make supplementary voluntary contributions to the Canada Pension Plan in order to enhance their retirement benefits came up in 2010, former MP Ted Menzies was the parliamentary secretary to minister of finance Jim Flaherty.
Both trashed the notion.
“We have ruled out ideas we collectively determined cannot work,” Menzies told the House of Commons. “The verdict was unanimous. This was not a good idea.”
“We reject a voluntary plan because that would very much disturb the work of the Canada Pension Plan which operates on a different basis,” Flaherty explained.
What the then-finance minister had in mind was, in his own words, “a modest, phased-in increase on the mandatory side.”
Ottawa and the provinces spent the following years discussing pension reform until Flaherty summarily shut down the talks in December 2013. By then a number of provinces were sold on increased mandatory contributions to the CPP and an attending expansion of pension benefits. Indeed, Ontario’s Liberal government had signalled that it was ready to go it alone.
If Flaherty needed a political incentive to walk away from the federal-provincial table, that Ontario commitment was it. At the time, Conservative strategists believed (wrongly) that the provincial Liberals would be clobbered at the polls if they went ahead with a supplementary Ontario pension plan.
As of the termination of the federal-provincial talks, Flaherty’s initial goal of raising the mandatory contributions became – in the words of his own government – a “job-killing, economy-destabilizing, pension-tax hike.” The rhetoric endures to this day.
But it was only on Tuesday that Harper’s government came full circle and embraced the voluntary plan it had once argued against.
The last federal budget was silent on pension reform. The net result of that omission is that when Oliver comes calling in the provincial capitals this summer it will mainly be in his capacity as the Conservative candidate for the Toronto riding of Eglinton-Lawrence.
He will be peddling a Conservative election promise.
One of the many provincial venues where he can expect a cool reception is Queen’s Park.
The reality is that Canadians do not lack for vehicles that promote voluntary pension-building savings, but millions of them do not use them and end up not setting enough money aside for a decent retirement.
In contrast with Oliver’s scheme – which is geared to those who do save – the proposed Ontario plan addresses that fundamental issue. And, in contrast with Oliver, Premier Kathleen Wynne has secured an electoral mandate to implement it.
Still, the ruling Conservatives expect that the voluntary nature of their proposal will make it an easier sell on the campaign trail than the opposition parties’ contention that a universal increase in contributions (and benefits) is in order.
It may help fend off the perception that their last budget – with the doubling of contributions to tax-free savings accounts (TFSAs) – was crafted to benefit the more affluent few rather than the more cash-strapped majority of working Canadians.
But it also sends a different, less attractive message about the current Conservative mindset. In order to regain momentum in voting intentions and make it back to the magic threshold of a majority victory, the government is scrambling for rabbits – whether they are dead or alive – to pull out of its hat.
On Tuesday, the rabbit took the shape of a summer tour of the deserted provincial legislatures designed to create the appearance of action on pension reform.
On Monday, National Post columnist John Ivison reported that another GST cut is under consideration.
That too never came up in the April budget and for good reason. There is nothing in the latest fiscal forecast presented by the Harper government that suggests it can afford the $7-billion price tag of another GST cut anytime soon, if ever.
Increasingly it seems the Conservative party is ready to make election promises that the Conservative government knows it can’t or should not implement.
Chantal Hebert is a national affairs writer. Her column appears Tuesday, Thursday and Saturday.
Copyright 2015 – Torstar Syndication Services