Irum Khan
Canadian prime minister Stephen Harper has consistently changed his stand on the enhanced Canada Pension Plan (CPP) scheme. From calling it a fictitious argument with no future in 1997 to promising an enhanced CPP and Old Age Security Scheme to be “fully preserved” in his 2004 and 2006 campaigns, Harper has been hoodwinking provincial leads in bringing about the pensioner’s reform.
In an unprecedented move before the October 19 election, Ontario premier Kathleen Wynne while in an interview to the media backed Justin Trudeau to battle the prime minister’s apparent lack of vision in implementing the reform.
The CPP levies a contribution rate on pensionable earnings of 9.9 per cent, split equally between the employee and the employer. If self-employed, one pays the full amount. The maximum contribution for employers and employees in 2015 is $2,479.95 per head.
Wynne has proposed to bring an additional OROP, which includes a joint funding by employers and employees, who would contribute 1.9 per cent each. However, companies with comparable pension schemes would be exempted from the scheme.
Many analysts have charged her with raiding on Canadians’ savings for government expenditure, while some have given her initiatives the thumbs up. However, a closer look on reality would bring a new perspective to what she looks forward to implement.
Take the case of Leo, a pensioner in Edmonton, who lives in an old-age home run by the Salvation Army. He earns a monthly pension of $1,700. However, his living expenses, including rent and food, amount to $1,900.
He complains, “I have to rely on my bank savings for any additional expenses incurred. A pack of cigarettes alone costs me $200 a month. I fear I would have nothing to set aside for my children, one of whom is wheelchair-bound.”
Leo’s complaint is legitimate, as the rising incomes leave not just seniors, but also the working class, with very little savings. The expansion of the CPP could probably mean a little less expenditure in the present for an enhanced security in the future.
Interestingly, Canada’s opinion is divided, because Wynne has so far failed to produce any concrete plan to administer the OROP scheme. She blames the federals for refusing aid in administration.
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