EDMONTON - The Alberta Federation of Labour says the provincial government needs to get on board with Canadian Pension Plan reform or get out of the way.
In a report released Tuesday, titled "It is broke ... so fix it!" the AFL warns that a significant number of Albertans are facing a lower standard of living once they retire.
According to the report, while the average Albertan's pension is $60,000, more than half of senior families have no pension. Among those without pensions, 38 per cent have RRSPs or Registered Retirement Investment Funds.
"Albertans simply don't have enough money to provide what they need when they retire, and the problem is getting worse all the time," said Gil McGowan. "Despite our wealth as a province, we're not being spared this problem."
As the province plans for a surge in Alberta's senior population as the baby boomers reach 65, McGowan said the government needs to support expanding the CPP.
In a meeting of Canada's federal and provincial finance ministers in June, the consensus was to work on a plan that would see a modest increase in the Canadian Pension Plan benefit. Since then, Ted Morton, Alberta's Minister of Finance and Enterprise, has been the only minister to publicly oppose the increase. Morton said the current pension system is very good and that reforms would do more harm than good.
"The problem is very specific; it's not the higher income brackets, it's not in the low income brackets, there's a certain portion of middle-income Canadians that haven't saved enough for retirement," he said. "That's where the remedy has to focus."
Morton said increased CPP contributions are an additional, unneeded payroll tax that would hurt economic recovery efforts.
"We still have an unemployment problem in Canada," he said. "Putting an extra payroll tax on employers is not the thing to do when you're trying to create more jobs."
NDP MLA Rachel Notley said the reforms were long overdue and said the ministry was taking a backward approach.
"If you compare us to many much more progressive countries, particularly in Europe, our low level of retirement planning is quite shameful," Notley said.
Edmonton Journal, Wed Nov 17 2010
Byline: Conal Pierse