Canada’s New Prime Minister: One-on-One with Justin Trudeau
Justin Trudeau has been sworn in as Canada’s 23rd prime minister and the second-youngest prime minister in history. Here, read our exclusive interview back in March when the Liberal leader came out swinging on CPP reform.
With the Canadian Pension Plan turning 50 this year, EZ interviewed Liberal leader Justin Trudeau on the important legacy of the program and why he feels the Conservatives have dropped the ball on strengthening the CPP for the next generation of retirees.
In 1965, the Liberal government of Lester B. Pearson passed an ambitious new plan that aimed to eliminate senior poverty by providing retired workers with a modest but guaranteed annual income. The result was the Canadian Pension Plan, now celebrating its 50th anniversary.
Though the structure of CPP has changed over the years, the general principle remains the same. All working Canadians over the age of 18 pay a percentage of their annual earnings (right now it’s 9.9 per cent, half of which is paid by the employer, the other half by the employee). The Canadian Pension Plan Investment Board invests these proceeds and, when you reach 65 (though you can begin collecting as early as 60 or as late as 70) you begin receiving a monthly payout. (Full details of the plan can be found here.)
While the CPP has been lauded worldwide for delivering on its promise of reducing senior poverty and providing peace-of-mind retirement income, there’s a general feeling that perhaps, at 50, it’s begun feeling it’s age. Pension experts suggest that under its current structure, the plan is no longer capable of providing the same financial retirement security blanket it once could.
That’s why CARP has been lobbying the federal and provincial/territorial governments to consider expanding or enhancing the CPP, primarily because individual Canadians are just not saving enough for their retirement on their own. The Conservatives failed to reach a consensus with the provinces on CPP reform and repeatedly put the idea on the back-burner, arguing that increasing premiums would place too much burden on our already fragile economy. In lieu of federal action, Ontario and other provinces have begun looking into the possibility of going it alone, providing a provincial solution to this impending pension problem.
Last October, while addressing CARP’s Annual General Meeting, Justin Trudeau promised that – if elected – he would push ahead with CPP enhancement. In late March, we reached Mr. Trudeau by phone at his constituency office to discuss the legacy of public pensions and why he’s made CPP enhancement one of his key election platforms.
EverythingZoomer: What’s the legacy of the Canada Pension Plan?
EZ: “Wait til the economy improves” was the mantra Conservative finance ministers used to delay reform. Will the health of the economy be a factor regarding how soon you make changes to CPP?
No, I think part of the instability in the economy and the uncertainty Canadians are feeling is directly related to the anxiety we have about the future. People are worried about their retirements, they’re worried about their kids’ ability to get jobs that are going to contribute to social services that an aging population needs – there’s an anxiety now that the federal government should show leadership on and flat out say: “Yes, we need to strengthen and expand the CPP.” That’s something the Liberal party is saying and standing firm on.
EZ: Small businesses and the self-employed worry that increased CPP premiums might put a big dent in the bottom line? Are you hearing this as you go out on the road?
JT: I have been hearing that but I’ve also been talking to a lot of different provincial premiers who highlighted that there are different models, different ways of strengthening and expanding [the CPP] that will have varied impacts on groups you want to help or draw a little more from. That approach is why sitting down collaboratively with the provinces to discuss and work together and to figure out a model that is going to work for all Canadians in terms of enhancing and securing retirement while at the same time continuing to stimulate and promote the kind of growth in our economy that we need. It’s a balancing act the federal government can’t do alone and needs to work with others in order to get it right.
EZ: When you visited the CARP AGM in October, there was a lot of interest in this issue. Does it just resonate with older Canadians or is it striking younger Canadians as well.
JT: It’s striking everyone. The general anxiety of what people are feeling is really there. Even people who are still decades away from retirement are dealing with aging parents and relatives who are struggling with retirement. And we have the sandwich generation, which has both kids returning from university to live back at home while they’re caring for elder parents. People are very, very aware of this. And how we’re going to make sure, as a society, that we’re offering support and help to the largest possible number of people is key for me.
EZ: Does being leader of the party that started the program back in the ’60s carry a special significance for you?
JT: We’ve seen this government refuse to acknowledge events as varied as the 50th anniversary of the Canadian flag, the 30th anniversary of the Charter of Rights and Freedoms, this government approaches things in a very partisan way. I find that both disappointing and out of keeping with tradition. I’m more than willing to stand up and talk about Mr. Mulroney’s extraordinary efforts on leading the world in the fight against apartheid or highlight Mr. Diefenbaker’s Bill of Rights. To me, not liking the CPP because it was a Liberal invention is the kind of crassest politics that, quite frankly, is one of the reasons why Canadians are getting so incredibly cynical about politics in general but about this government in particular.
EZ: In your wildest dreams, did you ever imagine you’d become such an expert on pensions?