Op-Eds

For much of the last decade, Canadians have been told their debt levels were unsustainable and that their day of reckoning was fast approaching. Data recently released by the Office of the Superintendent of Bankruptcy (OSB) seem to indicate that day has arrived. According to the data, insolvencies by Canadian consumers were up 9.2 per cent in October 2018, compared to a year earlier. To say the least, these results appear alarming. But in light of what we know about homeownership and net worth, we are not so sure. The data show that Canadians’ net worth has never been higher. Moreover, the data do not distinguish between the more harmful economic effects from households in negative net asset positions, or balance sheet...
Canadians want a reliable retirement income so they can enjoy life without worrying about outliving their savings. They also want flexibility so they can adapt to changing circumstances, particularly relative to their health. Delaying receipt of public-pension benefits — Canada or Quebec Pension Plans (C/QPP) and Old Age Security (OAS) — to age 75 can help on both counts. Retirement planning is challenging. Most of us struggle with how much money we need to save, and we see post-retirement financial decisions as a separate and secondary consideration. Yet, as we show in our recent C.D. Howe Institute study, the manner in which savings are used in retirement has a direct impact on how much we need to accumulate prior to retirement and...
Hugh Segal is principal of Massey College. He served in the Canadian Senate as a Conservative from Ontario and was vice-chair of the subcommittee on urban poverty. Every democracy’s internal legitimacy is tied to how fair the residents of that country feel their society is or tries to be. The fairness of laws, the fairness of government generally, the mix of fairness and opportunity writ large across the entire economy, fairness in the workplace and fairness of the tax system—these all matter. That’s why successful economically prosperous economies have a special duty to keep working at fairness and reducing the pathologies that poverty imposes in ways that deny opportunity, expands the bureaucratic state and widens...
The bankruptcy of Sears Canada, and the threat that its underfunded pension plan won't pay what it promised, has caught the attention of members of Parliament. Understandably so. People don't get a second chance at retirement. Getting an annuity less than you counted on is a terrible blow. After the sponsor of an insolvent pension plan has gone bankrupt, moreover, governments have no happy choices. A bailout – taxpayers paying for the actions of an irresponsible employer – would be unfair, and set a terrible precedent. Some want a national pension guarantee fund that would charge premiums and pay out upon failures. But experience in the United States, Ontario and elsewhere shows that those schemes also tax responsible people to cover...
Low fertility rates, increasing life expectancies and the aging of baby boomers are causing Canada’s old-age dependency ratio to rise. This increase in pensioners relative to the working-age population will strain the sustainability of our social security system. Should the age of eligibility (AOE) for seniors’ programs be raised? If so, when? Since Ottawa seems to be avoiding the problem, we propose a politics-free solution. We propose that Ottawa adopt an automatic balancing mechanism that would automatically adjust the AOE for programs like Old Age Security (OAS) and Canada Pension Plan (CPP) based on demographic calculations outside of political influences. The formula would deem that a constant proportion of one’s adult life be...