Invest surplus in retirement benefits, labour says

Invest surplus in retirement benefits, labour says

‘It’s time we gave the country’s poorest seniors a raise’: CLC president.

Ottawa needs to invest some of next spring’s budget surplus in higher benefits for low-income retirees, the Canadian Labour Congress says.

“It’s time we gave the country’s poorest seniors a raise,” CLC president Hassan Yussuff told a CLC event in Toronto Wednesday.

An increase in the Guaranteed Income Supplement is just one of the planks in a broader campaign the labour group is launching in advance of next year’s federal election.

Instead of giving tax breaks to the richest Canadians through income-splitting schemes, Ottawa needs to address the looming retirement income crisis, Yussuff said.

The Congress also wants Ottawa to double the value of future Canada Pension Plan benefits, in part to offset the decline in employer-sponsored plans and the shift to less secure retirement schemes.

The group is urging its 3.3 million members to call on their local MPs, sign petitions and use social and local media to make it a federal election issue, particularly in the Greater Toronto Area.

“Clearly this has to be a ballot box issue in the next election,” Yussuff said. “We’re headed for a financial crisis for seniors in this country.”

Many members of Stephen Harper’s governing Conservative party, including federal finance minister Joe Oliver, were elected in Greater Toronto Area ridings, Yussuff noted. “We’ve got to hold their feet to the fire,” he said.

The average retiree in Toronto receives just $1,595 a month from federal retirement programs, including the CPP, the congress said. That’s barely enough to cover the rent on a one-bedroom apartment, plus food, transportation and phone service.

Low-income seniors can’t afford TTC tickets, fresh produce or other basics of life, said Helen Liu, who worked for 20 years in the hotel industry in Toronto after emigrating from China.

“We count every penny. We walk everywhere. Some seniors go to food banks,” Liu told the 80 seasoned union organizers attending the gathering in the United Steelworkers hall in Toronto.

The labour meeting took place on the same day the federal finance minister issued his fall fiscal update saying next year’s budget surplus would be smaller than expected due to recently announced tax cuts and the impact of falling oil prices on tax revenues.

Ottawa now expects to run a $2.9 billion deficit this fiscal year, which ends March 31, 2015, and a $1.9 billion surplus next fiscal year, down from a previously forecast $6 billion surplus, Oliver said in a speech in Toronto.

The surplus will be the first since the financial crisis of 2008.

Recently announced tax cuts will allow families with children to lower their overall tax bill through income-splitting, which will cost federal coffers $2.4 billion, Oliver noted. Critics say the measure will mainly benefit higher income earners.

The government has also given small businesses a break on employment premiums.

Improving the CPP will take some time to implement and benefit mainly younger workers, who face an uncertain future in a world as fewer employers offer pension benefits, the labour congress says.

The increase could be phased in over a seven-year period, with both employers and employees seeing their contributions to the CPP rise from the current 4.95 per cent of pay to 7.4 per cent, the labour meeting heard.

But Ottawa could immediately improve the conditions of Canada’s poorest seniors by boosting the GIS benefits in next year’s budget, the congress said.

The labour group didn’t specify how much of a hike is needed. It had previously called for a 15 per cent increase, which would have cost Ottawa $700 million. The maximum GIS benefit is $764.40 a month for a single person.

The federal and provincial finance ministers agreed at a 2010 conference in Charlottetown to enhance CPP benefits.

But Ottawa has repeatedly delayed the implementation, saying the economy is still recovering from the recession of 2008.

Banks, insurance and other financial companies don’t want an enhanced CPP, the labour congress said, because it will take a chunk out of the market for RRSPs and other private savings plans, which are highly profitable for the companies that offer them.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s