On the evening of March 4th, our team of writers and editors settled in for a long night, preparing to broadcast news of the 2010 Federal Budget to our readers. While we weren’t expecting miracles, we were hoping for some progress on the pension reform front. But we were disappointed: what we got instead is a budget that largely ignores pension and benefits issues.
After a prolonged period of government stimulus, it’s not surprising that the focus of this year’s budget is on reducing the deficit. The government aims to cut the deficit almost in half in 2011/12, to $27.6 billion, with a further two-thirds reduction to $17.5 billion in 2012/13.
However, the strategy for achieving these aggressive targets remains opaque. When asked what happens if the plan proves too optimistic or economic activity once again interferes with the best-laid plans, the gist of the response was, “Well, there’s always another budget….”
From a pension perspective, the budget did reaffirm the government’s commitment to “ensure that Canada’s retirement income system remains strong and efficient through spring consultations and a review of policy options at the May Finance Ministers’ meeting.” But this suggests there’s been little progress since the December meeting in Whitehorse. Instead of a solution, the next step is another meeting—and another delay in acting.
It seems that the issue of retirement income security for Canadians has moved off of government agendas. Pensions were a hot topic last year, but now, reform may once again be relegated to the bottom of the list of government priorities.
This is a growing concern within our industry. At our 11th annual DC Plan Summit in February (see page 40 for coverage of the event), various pension reform options were discussed and hotly debated. However, the focus was on those that won’t rely heavily on government involvement; for example, looking to the defined contribution recordkeeping industry to offer employment-based pension plans to all working Canadians. Naturally, the government would have to play a role—but some stakeholders don’t want to leave it to the government to take more decisive action.
Fair enough. If next year’s budget is anything like this year’s, we could be waiting awhile. BC
Alyssa Hodder is Editor of Benefits Canada.
alyssa.hodder@rci.rogers.com
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© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the April 2010 edition of BENEFITS CANADA magazine.