Last June, the provincial and federal governments said they would look at a three-pronged reform: financial literacy, regulatory changes to give the private sector more freedom to offer low-cost savings options and gradually enhancing the CPP.
What Flaherty has done is to shift to the Bush model which was skewered by his own party and eventually died. The problem then is that most people were understandably skeptical of how it was being communicated and the fact that a complete moron was pushing the idea.
That's a similar problem here. Flaherty is certainly no genius and we can easily suggest that he's "economics challenged". This is the same idiot who told us, in the slide to the financial fire-pit, that we weren't in a recession when the CPP Reserve Fund had already demonstrated a negative return in March of 2008.
So what caused Flaherty to shift from a widening of CPP to his "radical new idea", (borrowed from the worst presidential administration the US has ever known)?
Same reason as Bush had for wanting to get out from under it. Exactly the same reason. The Harper government has incurred the most massive deficit in Canadian history and they borrowed against the Canada Pension Plan Reserve Fund. The same time that they incurred an enormous deficit the Canada Pension Plan suffered a negative return on investment of -19 percent losing 17 billion dollars in Net Asset Value in one year.
In short, to keep CPP viable and on track with its current growth targets Flaherty and Harper would have to raise premiums and taxes. That would shatter their already tenuous base. Believe me, Flaherty will screw an entire generation of retirees if it means he can keep his job.
Harper and Flaherty. The worst financial managers the Canadian government has ever encountered.
Impoliticalhas more questions and a copy of the surprisingly sparse framework on pension changes Flaherty is proposing.