Modeling Journey

Here is one problem for Michael Ignatieff to mull over: only one in four of voters 45 years old or older favour the Liberals, while almost half prefer the Tories. The Conservatives have walloped the Liberals by opening up a huge gap in potential support amongst the older voters.

The EKOS poll of October 15, 2009 shows that amongst those 65 and over, a startling 50.3% favoured the Conservatives, compared to only 27.7% for the Liberals. Amongst the 45 to 64 year old group, the Tories lead with 44.5% compared to the Liberals' 25.1%.

But do not abandon hope, All Ye Liberals!

There is a chance for the Liberals to present a policy to the voters which could dramatically change the relative support of the two national parties by older Canadians.

That opportunity arises from a simple fact: millions of Canadians do not have any or adequate pensions, other than the pitifully small CPP and OAS.

Today's Globe & Mail introduces a week long series dealing with the appalling state of the nation's pensions, and the reluctance of federal and provincial governments to publicly recognize the problem, and to protect older Canadians.

This gives us the chance to forge policies which promise all Canadian seniors a decent life after retirement. This will require the Liberal Party to be bold and innovative, but by staking out the territory of pension reform, the party could win over a big chunk of the senior vote (remember, more seniors actually vote in elections, far more than other age groups do), and at the same time fill a vacuum in our political space left by the timorous right wing Harper minority government, and the equally fearful provincial governments.

How big is the problem?

Consider these facts:

"Another set of poorer Canadians should never have had the illusion of security in the first place. A large proportion of workers - 44 per cent, or eight million Canadians - have neither an RRSP nor an employer-based registered pension plan. A growing proportion is self-employed. They will depend on the Canada and Quebec Pension Plans and government backstops like Old Age Security. These provide basic assistance, but little more. The maximum CPP monthly payment for a 65-year-old is $908.75. Unless blessed with other assets, a senior who relies on the public system alone lives a life of poverty."

Ignatieff can start by reading the G&M editorial, which contains these suggestions:

"With so many Canadians at personal financial risk, a new approach is needed. Regulators must be more active in monitoring plans between official evaluations. Governments should facilitate the creation of multi-employer pension plans, whose scale can help spread risk and attract workers from smaller workplaces; new plans could get tax credits to encourage their growth. Commitments inherent in existing defined-benefit plans should be legislatively enshrined, so that they cannot be lost in bankruptcy or squandered when good times make plan administrators succumb to the temptation to reduce incoming payments. The principle, outlined by University of Toronto professor Keith Ambachtsheer in an unpublished paper, is that "accruing pension promises must be fully costed and fully funded at all times."

But employers do not need to wait for the government's hand. They can ensure their plans are better funded by setting higher default contribution rates from employees. Other employers can facilitate payroll deductions to the savings account of the employee's choice. As long as these schemes, or "nudges," as described by the economists Cass Sunstein and Richard Thaler, still leave the ultimate choice on whether to participate in the hands of individual workers, they should be pursued widely. And employers must see the larger public benefits that come with their sponsorship of pensions."

For starters, the Liberal Party should consider making it obligatory for each and every employed or self-employed Canadian to make larger contributions to a revised pension plan, with contributions to the pension plan from both the employer and the federal government. Then the LPC can implement some of the other recommendations of the G&M.

But we should be bold, and innovative, and by so doing, differentiate ourselves from the Harper Tories, who have proven themselves incompetent and untrustworthy in many things, including protecting senior Canadians.

Let us entrench the right of our senior citizens to a decent standard of living after their retirement in our laws, and take steps to make that happen.