On the eve of what many believe to be the most important political meetings addressing pension matters in Canada in a quarter century, questions persist as to what Canadians can really expect to come out of what has loosely been deemed the “Whitehorse summit”.
The Ministers of Finance from the federal and provincial governments will convene in Whitehorse, Yukon on December 17th and 18th. On the agenda is the state of Canada’s retirement income system and what, if anything, can or should be done about it. Much can be gleaned from the advance positions being taken by many involved in the debate.
At the federal level:
- The minority Conservative government has recently introduced alimited slate of legislative reforms many of which simply bring the federal pension legislation up to speed with its provincial counterparts. Representatives of the federal government have also made numerous “positioning” statements regarding the need for Canadians to take more personal responsibility for their retirement savings, and the government’s intention not to force any measures on the provinces but rather to encourage the provinces to work together and to, potentially, provide new incentives for retirement savings through the tax system;
- The federal Liberals have released the broad outline of their proposal for a supplementary Canada Pension Plan; and
- The federal NDP are pushing for an enhanced Canada Pension Plan benefit and mandatory, self-financing insurance by DB plan sponsors.
At the provincial level:
- The Alberta and British Columbia governments have appointed a joint industry advisory group to assist in the development of legislation based on the Report of the Joint Expert Panel on Pension Standards (JEPPS) (PDF), though new legislation is not expected for at least a year or more. The two governments have also been vocal in their calls for a national solution to the pension coverage dilemma to emerge from the Whitehorse meetings, failing which they intend to proceed with development of a regional pension plan patterned largely on the “ABC Pension Plan” concept from the JEPPS Report, possibly also including participation by Saskatchewan and Manitoba;
- On December 9th, Ontario released amendments to its pension legislation in its first limited phase of a two-phase implementation of reforms based on the Report of the Ontario Expert Commission on Pensions. Thus far, Ontario has shown only tepid interest in national-plan coverage solutions; and
- The Nova Scotia government has expressed fears of a two-tiered pension system developing in Canada if national consensus cannot be achieved.
Over the past weeks and months, many other industry, labour, plan member, retiree and professional groups have also expressed their views on how the governments should address these issues.
What can be drawn from these positions?
On the good news front, pension issues are receiving unprecedented attention, both at the political level and in the public consciousness, through the mainstream media. A groundswell of support will be necessary before any political action is likely. However, as yet there seems to be little sense of any emerging national consensus, either on legislative reform or on national solutions to the coverage question. Lost amidst much of the debate in the past year is the broader question of national harmonization of pension standards.
With the stage thusly set, are expectations for the outcome of the Whitehorse meetings too high?
These discussions are, in fact, regularly scheduled annual meetings of the Finance Ministers. While pensions are on the agenda, they are not the only matters to be discussed, making the northern gathering less than the “summit” that many seem to be expecting. There are, however, indications that these meetings may indeed set the stage for an actual summit on pension issues sometime next year.
It is expected that the Ministers will receive in Whitehorse the results of the research conducted by the Research Working Group on Retirement Income Adequacy, established earlier this year as a joint initiative of the federal and several provincial governments. Given the significant initiatives and reforms already proposed or underway in many provinces, reaction to the findings of the Working Group may well be key to determining whether our governments are willing to work together towards national solutions, or whether the various governments will move on in their own provincial or regional directions.
What is becoming clear, however, is that the Whitehorse meetings are more likely to serve as the starting point for whatever direction any coming changes to Canada’s retirement income system will take, rather than being a finish line based on the significant dialogue that has already occurred to date.