Has a politically savvy prime minister taken a wrong turn?

Lana Payne
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Has Stephen Harper's ideology finally won out over self- preservation?

On the surface, it would appear so when you consider the firestorm he sparked with the announcement, in another country, that his government intends to overhaul Canada's Old Age Security (OAS) program, one of the pillars in the country's pension system.

The Conservative spin is that we can't afford OAS because of the millions of baby boomers set to retire. Currently, about 4.9 million Canadians collect OAS benefits. By 2030 that number is expected to reach nine million before starting to decline again.

So, yes, the costs of OAS will go up, but are the benefits unsustainable or is Mr. Harper misleading Canadians with big numbers that, in and of themselves, don't mean a lot?

Government actuarial reports say OAS is indeed sustainable, contradicting the position being put forward by the government. Facts once again get in the way of a "conservative message box."

The total cost of OAS is projected to increase to 3.2 per cent of GDP from 2.4 per cent of GDP today. As some economists have pointed out, a less than one per cent increase in GDP is a small price to pay to maintain a basic retirement income for all Canadians, especially those with low incomes. And it is those seniors who will be hurt the most by changes to OAS.

So Stephen Harper's musings in Davos, Switzerland two weeks ago that we must act to make OAS sustainable was a load of misleading baloney.

The question is why, as a Conservative pundit pointed out during a Twitter exchange, would Mr. Harper do something that would alienate his voting demographic? The Conservative pundit was referring to the over-55-year-olds who, in larger numbers, tend to support the Conservatives.

My reply was that Harper's plan for OAS was unlikely to include changes that would hurt today's seniors, but rather cheat the next generation, forcing them to work longer so he can finance his priorities: things like fighter jets and $13 billion a year in reckless corporate tax cuts.

Either that or like a couple times in the past, Mr. Harper has lost all sense of self-preservation and has allowed ideology to rule. After all, this is the same prime minister who proclaimed that there was no such thing as a good tax. Good taxes pay for OAS and ensure seniors in our country do not fall into abject poverty.

Actually, I think it is a bit of both: Harper will make changes that impact younger workers and ideology is now overruling political self-preservation.

What he didn't count on, a rare political mistake for strategically ruthless Mr. Harper, was the pushback.

Angry seniors are calling and emailing Conservative MPs.

People close to retirement, who have 10 years or less left to work, are wondering if they will now need to work longer in order to qualify for OAS.

The baby boomers are worried. Young workers don't vote for Mr. Harper and so he could care less about them.

But the prime minister's OAS musings are an absolute gift to his political opposition, reinforcing the belief the majority of Canadians already have of this prime minister. They just don't trust him with their Canada.

Mr. Harper and his minister of exaggeration Peter Van Loan, who outrageously compared Canada to Greece, have refused to deal in facts.

They have refused to recognize that the real problem with Canada's retirement security system is not OAS or the peanuts that are paid to the poorest Canadians in the Guaranteed Income Supplement.

The problem is the Canada Pension Plan's income replacement rate is much too low at 25 per cent and should be increased to 50 per cent in order to ensure some level of retirement security for the majority of Canadians.

The problem is that the supposed third pillar of Canada's retirement system - workplace pension plans or private savings - is not much of a pillar.

Employers have not done their part.

Nearly 13 million Canadians have no workplace pension. Only about one-third of Canadians contribute to RRSPs. Most of those RRSPs are purchased by the top 20 per cent of income earners.

There is no doubt that Canada's pension system needs reforming, but Mr. Harper has the wrong medicine. If our prime minister was interested in "retirement security," he would move to enhance CPP instead of letting employers off the hook while handing them billions in tax breaks.

But that appears unlikely to happen under this prime minister, who is bent on using his majority to transform Canada into a fend- for-yourself nation.

Fortunately, I have more faith in the people of Canada than he does.

This time, Mr. Harper may find that he has gone one step too far. But will he blink?

Lana Payne is president of the Newfoundland and Labrador Federation of Labour. She can be reached by email at lanapayne@nl.rogers.com. Her column returns Feb.25.

Organizations: Old Age Security, Conservatives, Newfoundland and Labrador Federation of Labour

Geographic location: Canada, GDP, Davos Switzerland Greece

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Recent comments

  • Dee
    February 11, 2012 - 20:06

    Wow, Carl, you really are living in a bubble, aren't you? The government isn't managing money for people, it's ensuring those that make barely enough to live on won't have to live on the streets when they are seniors. They ensure everyone has some form of income. It's all nice that you're "responsible" but what about the housewife out there whose husband dies penniless or takes off with a blond....what is she supposed to do? OAS protects EVERYONE. Anyone who thinks not being able to save for retirement is only a matter of responsibility is living in that bubble. And obviously so selfish because they don't want their money helping others when they're so well off. What's ironic is that Christians are a big part of the Con base but are the first ones to whine about their money going to help others. Not only selfish. Hypocritical.

    • Carl
      February 12, 2012 - 12:46

      Dee, there is a big difference between income safety nets and government-run retirement schemes. You are talking about the former, while I am talking about the latter. OAS is NOT targeted to poor seniors like the hypothetical single housewife you mentioned. All seniors receive the maximum about of OAS unless they bring in over $67,000 of annual income. And all seniors continue to receive some OAS until they reach $110,000 of annual income. But there are already all kinds of social safety nets for poor seniors, including social assistance and the GIS, which are both targeted toward low-income people. I agree that such programs should remain in place, and even be enhanced. But OAS is useless and redundant.

  • Elizabeth in Central
    February 11, 2012 - 18:52

    Funny how left-wingers insult everything they disagree with by calling it "ideological." If Harper's position is ideological, and Payne takes the opposite position, then isn't her position ideological too? Just a different ideology. By the way, ideology is a good thing. According to Oxford, it means "the system of principles and ideas forming the basis of an economic or political theory." I'm glad Harper's thinking is guided by ideas and principles. But apparently Ms. Payne doesn't like ideas and principles.

    • Jack
      February 11, 2012 - 22:29

      In opposition to what some may think all ideologies aren't good. For example Fascism and Nazism are ideologies. If you want to get an understanding of Mr. Harper and the Conservatives research Neoliberalism.

    • Elizabeth in Central
      February 12, 2012 - 12:37

      I didn't mean to imply that all ideologies are good. But the absence of any ideology at all is definitely bad. It results in politicians motivated by nothing but their own self-interest. For example, the Liberal Party of Canada has no ideology at all. The NDP has a socialist ideology, which is evidently shared by Ms. Payne. So for her to imply that all ideology is a bad thing is simply hypocritical.

    • Politically Incorrect
      February 12, 2012 - 17:30

      "the Liberal Party of Canada has no ideology at all. The NDP has a socialist ideology." It is astonishing on how many levels you manage to be so completely WRONG! I'm actually surprised that you can spell NDP.

    • Elizabeth in Central
      February 13, 2012 - 09:52

      Your childish insult does not change the facts. The preamble of the NDP constitution reads: "The New Democratic Party believes that the… progress of Canada can be assured only by the application of democratic socialist principles... That the production and distribution of goods and services shall be directed to meeting the social and individual needs of people… and not to the making of profit… to modify and control the operations of monopolistic productive and distributive organizations through economic and social planning… the extension of the principle of social ownership."

  • Carl
    February 11, 2012 - 18:44

    Socialists like Ms. Payne have no respect for individual Canadians. She thinks we're too stupid or undisciplined to manage our finances, so she wants the government to take all our money and manage it for us. I wish Harper would scrap the OAS and the CPP altogether and let me keep my money so I can save and invest it for my own retirement. I don't need a nanny state to manage my finances for me, because I have something Ms. Payne doesn't have - it's called a sense of personal responsibility.

    • Townie
      February 12, 2012 - 08:33

      Carl if you don't want to live in a modern country,why don't you go to some place that you will feel more at home. Maybe Afganastan is callling you. The majority of the population think that the right wing crowd are nutjobs or fascists so I don't think anyone who tries to rule this country that way will last too long in power.

    • Carl
      February 12, 2012 - 12:50

      Townie, there is absolutely no substance in your post - just pure hate toward anyone who doesn't share your socialist ideology. Calling anyone in Canada a fascist based on their partisan affiliation is sick. Many members of my family fought long and hard - and some died - to defeat fascism. To bring that kind of rhetoric into a discussion about government retirement policies is way beyond the pale.

    • Townie
      February 13, 2012 - 12:21

      So you think your comments have substance. How dilusional.

    • Carl
      February 13, 2012 - 12:38

      By "substance" I mean a specific and debatable argument, rather than mere childish insults.

    • Taylor
      February 13, 2012 - 12:42

      Townie, you can't even spell the insults you are trying to hurl. FYI, it's "delusional."

  • Lane
    February 11, 2012 - 18:39

    Ms. Payne and her fellow hysterical lefties are going to look pretty silly when the Harper government actually announces its plan for OAS and the sky doesn't fall. Any change is going to be so gradual it won't be felt. And it will save taxpayers tens of billions of dollars, which they can then put into their own retirement savings.

  • John S
    February 11, 2012 - 17:43

    Thoughtful analysis, theres only one other thing to add: http://www.vancouversun.com/business/Tories+commit+pension+cuts/6080563/story.html Harper & Co. won't even considering cutting back on THEIR gold plated pensions

  • Ian
    February 11, 2012 - 10:28

    What we are seeing is the true Harper, the man many of us tried to warn people about before they voted. We are seeing that hidden agenda being uncovered...you know the one I mean, the hidden agenda Harper assured us did not exist when he said 'steady hand at the tiller'. These actions are not about a steady hand or economic stability. This is another fabricated crisis similar to the Income Trust Tax Leakage crisis they successfully manufactured back in 2006. The Halloween massacre was a betrayal of trust and the press let Harper get away with omitting facts such as the tax collected from Income Trusts when they are cashed from RRSPs...conveniently omitted facts. I said at the time that if the press did not hold Harper's feet to the fire on Income Trust lies that he would be back doing something equally horrible...well here he is. Only this time the people are mad and that's causing the press to look a bit closer at facts. This article correctly identifies the problem...Right Wing Reform Ideology escaping from under the Wooly Sweater. This single issue will lose the next election if the opposition can get their act together and unite the left.

  • eyeforlabour
    February 11, 2012 - 09:50

    The question and answers by the so called staus quo is,really nothing more than a cop out catered to the corporate special interest group and lip service to the rest of us. Its simply wrong to throw Canada into the same mess as Greece,Portugal or any of the other struggling EU members. The very point that our vast Natural Resources are being exploited with very little compensation to Federal or Provincial coffers says it all. These jurisdictions are giving away vast amounts of mineral,carbons,lumber and other commodities for a token return. Totally despoiling at minimal cost for maximum profits at the expense of hard working Canadians. Fairness is a two way street!

  • Jim Garner
    February 11, 2012 - 08:56

    I don't think it's unreasonable to mention Greece and Canada in the same sentence. Greece is a fine example of what can happen when a government allows itself to be overly influenced by agitators demanding more spending on this that and the other. That did happen in Canada under Trudeau's Liberal regime and it was a later Liberal government (with Paul Martin as finance minister) that addressed the issue. Harper is right to at least study the cost of sustaining our retired generation (whatever the study finds out) and his ministers are right to wave the Greek flag at us. It's better than the (Greek) alternative.

  • Townie
    February 11, 2012 - 08:52

    This issue was not mentioned during the election. So why would seniors believe the government will not tink with their OAS even if they are already retired?