Waiting Out The Pension Years

While he was authoritatively castigating the Europeans and the Americans for not getting around expeditiously to getting their fiscal houses in order, Prime Minister Stephen Harper dropped a bit of a stink bomb on Canada. This is the Canada that the global financial downturn did minimal damage in. Well, damaging enough to those who lost jobs, and a whole lot of jobs have gone missing in Canada in the last few years.

There are those who are convinced that people have simply lost jobs to technological advances; more technology to produce a greater number of goods which require fewer employees to manage. Others, of course, point to the migration of manufacturing from unionized, high-paying countries like Canada to offshore countries with emerging economies and job-hungry populations.

Whatever the cause, Canada is in a situation of wan health, albeit not precisely the kind of ill health that has assaulted Europe and America. But of course, if Canada's trading partners are feeling pain, they're not then in the position to trade, to import from Canada. Impacting, of necessity, on Canada's economic fortunes.

So, recounting how Canada is preparing to tighten its own fiscal belt to cope with its deficit, Prime Minister Harper outlined some initiatives his own government is prepared to take, which his listeners at Davos, Switzerland - the finance ministers and presidents and prime ministers present who might wish to take note - could emulate.

From the "national priority" of exporting surplus energy products to distant destinations, to inviting emigrants from abroad with specific skills to benefit Canada, to investing in science and technology that results in a "modern competitive economy", and extending free trade agreements to the EU and the Trans-Pacific and India, Canada will be rolling out all the stops.

And ... speaking of stops, looking to the Old Age Security plan for streamlining. Canada has a growing demographic of retirees, the elderly who qualify for OAS which kicks in at age 65. But which, it appears, from what was hinted at, at Davos, may be kicked back to age 67. Canadians are living longer, and healthier. They're also, as they age, a burden on the health care system.

Of course if older Canadians are forced by circumstances to work until age 67 that means also that younger Canadians waiting impatiently in the wings of opportunity to take the jobs that seniors leave, will also have to wait. This would not, of course, bother people with good incomes, the opportunity to invest in RRSPs, alongside a good superannuation plan; say, for example, government employees.

But the thing of it is, even while it sounds semi-sensible, given the growing numbers of retirees - the cost of the OAS system is set to climb from $36.5-billion in 2010 to $48-billion in 2015 - it is those with low-end jobs with no prospects of a retirement fund, whose health is likelier to be impaired than the middle-class with a decent job-related retirement plan, who will be impacted.