By Bill Curry, Globe and Mail, January 31, 2012
Expert advice commissioned by the federal government contradicts Stephen Harper’s warnings that Canada can’t afford the looming bill for Old Age Security payments.
The Prime Minister and his ministers forcefully defended their surprise plans to review OAS on Monday, as the year’s first sitting of Parliament exploded with accusations from the opposition that the Conservatives misled Canadians during the 2011 federal election. ...
But research prepared at Ottawa’s request argues Canada’s pension system is in far better shape than the Europeans’, and there’s no need to raise the retirement age. Edward Whitehouse – who researches pension policy on behalf of the Organization for Economic Co-operation and Development and the World Bank – was asked by Ottawa to study and report on how Canada stacks up internationally when it comes to pensions.
His conclusion: “The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes,” and “there is no pressing financial or fiscal need to increase pension ages in the foreseeable future.”
While other OECD countries face big pension problems, the report predicts Canada will do just fine as the baby boomers retire. That’s because, as Canada heads into the boomer crunch, it spends far less than the OECD average on public pensions. Further, Canada’s relatively high levels of immigration will partially offset the distortions of an aging population, and Canadians tend to save more independently through RRSPs and workplace pensions than Europeans.
The report is one of six that fed into a larger summary paper written by the University of Calgary’s Jack Mintz that reported to federal and provincial finance ministers at a December, 2009, meeting. While this supporting research was overshadowed at the time, it stands in sharp contrast to forceful warnings now coming from the Conservative government. ...
The government’s claims leave experts baffled. Thomas Klassen, a York University political science professor who co-authored a 2010 report on Canada’s pension system, said his own research concluded that the OAS program is sustainable.
“I haven’t heard any academic argue that there’s a crisis with OAS, which is why I was surprised a few days ago when the Prime Minister seemed to say there was a crisis,” he said. “Because I don’t know where that came from.”
Prof. Klassen said he suspects the federal government has concluded that reducing OAS costs is an easy way to save money over the long term because it can be done unilaterally without negotiating with the provinces or public-sector unions. “It’s okay to look at Old Age Security pension payments,” he said, “but I think there’s got to be a lot more evidence that there’s a problem, and I don’t see that evidence.”
Kevin Milligan, a University of British Columbia economics professor who co-authored another of the supporting research papers prepared for Ottawa, is also of the view that there is no OAS crisis. He says the government’s use of statistics showing the cost of OAS will climb from $36.5-billion in 2010 to $108-billion in 2030 is not very meaningful because of the impact of inflation. He notes the rise is less alarming when measured as a percentage of economic growth.
“As an economist, I would never characterize things in terms of nominal dollars in the future because it’s hard to put those in context,” he said. “I don’t know what we’ll be paying for a litre of milk then.” Canadians are, once again, facing the perplexing paradox that the facts do not support the moves the government wishes to make, and especially those facts do not support the arguments the government is making for those moves.
The crime rate is falling; so we need more prisons and longer sentences.
The OAS is sustainable; so we throw out onto the public stage the argument that "demographics," an academic-sounding, authority-giving, intelligence-connecting word, will provide the kind of "ruse" or smoke-screen that we need to deflect the criticisms that will be inevitably mounted by the opposition, while at the same time, comforting our base that we are "responsible" and that we are making the necessary cuts to the budget to prove the government's justified claim to deserve a second majority government in 2015. Hogwash! Or as the Liberal leader might say, "Bullshit!"...but he can't say that in the House of Commons, because it is not parliamentary language.
The uncertainty of the next terrorist move against stability in the world means that the "big guns" of Fighter Jets and warships are not as essential as is sound, detailed and credible intelligence. So, this government proceeds to purchase the "big guns" just to recruit new young kids into the military and (but they don't mention this) to demonstrate just how committed they are to the strength and theatre of the military, in their political campaign for re-election.
The long-range planners, in all social development fields state publicly and loudly that they need the long-form census for their planning; so this government pulls the document from use, because there have been complaints about hte invasion of privacy.
It was George Orwell who wrote, in his scathing book, 1984, that War is Peace; Friends are enemies; truth is lies; history is and can be and will be re-written, making today's friends tomorrow's enemies, and today's enemies tomorrow's friends.
Of course, we read Orwell with ironic eyes, believing, hoping and praying that he was using satire to depict a kind of political "game"...however, today Harper and his gang, in the west, in what we used to think was a democracy, certainly not a totalitarian, nor a communist state, are generating more evidence of the horrible truth of Orwell's satire.
There is a reality for this government: today it is "austerity" and so the OAS is projected to come under their budget-cutting knives.
Tomorrow it will be "national security" and the jets and ships will be laughingly purchased, while the government smirks uncontrollably about the gullibility of the public. And they tell their stories to the media in such pompous and sonorous and heavy-sounding funereal sound bites that make them look serious, responsible and "in charge" with their "mandate from the Canadian people for a majority government."
They don't mention that it is their increases in spending of some 22% that has helped to generate the buget crunch.
That past of reality is not in the talking points produced by the prime minister's office, where all sound thinking and all grasp of reality is located.
If it weren't so tragic, it would be laughable, fit for a Swiftian satire, like the boiling babies in his "Modest Proposal".