With all of the provinces except Manitoba and Quebec agreeing to the expansion of the Canada Pension Plan, the Trudeau government is about to achieve one of its goals. To a great extent the debate boils down to a philosophical question. Who should be responsible for providing for us in our retirement? For the current government and for eight Premiers and answer is increasingly, the government. This is a radical departure from the mindset of the grandparents and great grand-parents of the current boomers. Many of these people grew up in the Trudeau 1.0 era in which the state was relied upon for more services. The trend has continued under both Liberal and Conservative governments since the late 1960’s so it comes as no surprise that Canadians are demanding that the state take a greater role in caring for them in their old age.
There’s a price attached to this of course. Premiums will rise starting in 2019 and will continue to go up. The messge is that we are no longer respnsible for our own retirement but that we must rely on the government to force us to save for ourselves. This will rankle the independant types. They may argue that the government over the years has deprived us of the means to provide for ourselves and that’s why we’re in the spot we’re in.
The upside to forcing Canadians to save for their retirement is that fewer people may be in dire straights in their decrepitude. One downside is that when we die our estate does not inherit our contributions as it would if our investments were privately held. Most of it goes back to the state. There’s also some question about how we can get the best return for our money. Is it through our own investments or through the CPP? Only the decades ahead will tell but asking the government to take over more control of our lives is always a risky proposition. Here’s hoping Canadians understand the risk they’re about to take.