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Why We Need An Improved and Sustainable CPP by Michael WolfsonIt's Time For Canada's Finance Ministers To Think Outside The Box
Why We Need An Improved and Sustainable CPP by Michael WolfsonIt's Time For Canada's Finance Ministers To Think Outside The Box
Why We Need An Improved and Sustainable CPP by Michael WolfsonIt's Time For Canada's Finance Ministers To Think Outside The Box
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http://umanitoba.ca/outreach/evidencenetwork/archives/9644
Second, the detailed simulation analysis I did last year for the Institute for Research on Public Policy (IRPP) showed that a doubling of the CPP would have only modest benefits even for those at the young end of the baby boom (those in their mid-40s today). The simple reason is that they will be reaching age 65 within 20 years, when the benefit increases would be less than halfway phased in. And third, high income individuals live and collect CPP pensions longer than those with middle and lower incomes. These factors in turn suggest essential policy responses, none of which has yet been addressed by Canadas finance ministers, at least in public. An expansion of the benefit levels of the CPP should be phased in more rapidly, say over 20 to 25 years rather than the 47 years implicit in all the current discussions. In parallel, the age at which full benefits from the CPP would start should rise gradually from 65 to 70. More rapid phase in of benefits, of course, means payroll taxes would have to rise. But a delay in the age when benefits become fully payable would reduce the need for tax increases. Finally, the long run structure of the Old Age Security (OAS) and Guaranteed Income Supplement (GIS) portions of Canadas public pension system should be coordinated with any changes to CPP to assure it is fair to those with lower incomes a point clearly lost on the Harper government with their most recent cuts to OAS and GIS. These options open the possibility of a more creative and better pension bargain more adequate pensions that are also fiscally sustainable. Are Canadas finance ministers ready to think outside the box? Michael Wolfson is an adviser with EvidenceNetwork.ca, and Canada Research Chair in population health modeling/populomics at the University of Ottawa. He is a former assistant chief statistician at Statistics Canada, and has a PhD in economics from Cambridge.