Conservatives look to undermine Canada Pension Plan

The Globe and Mail reports that the Conservatives are planning to cut CPP premiums that were raised under the Liberals in order ensure that the program would be sustainable over the long term.

In the interim they will use surpluses to fill the gap. But what happens if those surpluses disappear? This looks like a move that will make CPP “unsustainable”, and the next move in the game would likely feed off alarming reports from the right that dramatic action is required (think privatization) to “fix” this problem.

So, yet another tax cut from the Conservatives, this time a Canadian version of the attack on Social Security south of the border. Remember that the CPP is one of the pillars (the others being Old Age Security and Guaranteed Income Supplement) that ensure our seniors are not eating cat food when they can no longer work. There are some drawbacks, but overall Canada has done well in reducing poverty for seniors as a result of these programs.

This is also a story about how government can play a role in income shifting over the course of a lifecycle. You pay into CPP in your working years then get it back when you are a senior.