Time and Money: The Challenge of Demographic Change and Government Finances in Canada

As a result of demographic change, Canadian governments face a net liability of $1.4 trillion for healthcare, education, seniors' and children's programs. Meeting this challenge will require fiscal discipline, partial prefunding and growth-friendly policies.fiscal policy, demographics

Safe Harbours: Providing Protection for Canada's Money-Purchase Plan Sponsors

Fear of lawsuits may inhibit employers from steering employees into defined-contribution pension plans and RRSPs, and from guiding them into sensible choices for investing and withdrawing their money. Safe-harbour provisions that reduced this threat would help employers act in good faith to enhance the retirement incomes of Canadians.governance and public institutions, pension papers, defined-benefit plans, defined-contribution plans,

The Glacier Grinds Closer: How Demographics Will Change Canada’s Fiscal Landscape

The impacts of demographic change on Canada's fiscal landscape will be profound, and as we enter the second decade of the 21st century, they are no longer far away. If current patterns of spending in age-sensitive public programs - healthcare, education, elderly and children's benefits - persist as the population evolves, Canadians will divert more of their incomes from other public and private purposes to fund them. Discounted over 50 years, that increase amounts to an implicit liability of $2.8 trillion for governments, with essentially all the burden falling on the provinces and territories rather than on Ottawa.Fiscal Policy, Canada, demographics, government programs, health, education, seniors, families

Will C-36 Undermine CPP "9.9"? Benefit Enhancement and the Sustainability of the Canada Pension Plan

The Canada Pension Plan, like all pension plans and social-security programs, is under constant tension. On one side are current and hopeful beneficiaries, who typically want richer payouts. On the other are younger actual or potential contributors, who typically want lower or at least sustainable contribution rates. The CPP’s history reflects this tension: the repeated benefit enrichment, rising costs and growing unfunded liabilities that marked the 1970s and 1980s preceded reforms in the 1990s that trimmed benefits, ramped up contributions, and aimed to pre-fund enough of the program to hold its contribution rate at 9.9 percent.governance and public institutions, pension funding

Stuck on a Spoke: Proliferating Bilateral Trade Deals are a Dangerous Game for Canada

Canada’s Minister of International Trade, David Emerson, heralded a free trade agreement with the European Free Trade Association in June by saying “Canada is back in the game.” In July, the government announced talks on free trade with Colombia, Peru and CARICOM (the Caribbean Community). While the new agreement is an overdue triumph over special interests, and western-hemisphere liberalization offers economic and political benefits, a broader view of trade policy shows that Canada has fallen behind — and is perhaps even playing in the wrong arena.international policy, trade strategies, NAFTA

Found Money: Matching Canadians' Savings with Their Infrastructure Needs

Crumbling bridges and leaking pipes need fixing; new roads and power lines need building as cities cope with growth — Canada needs infrastructure investment. Last fall’s Advantage Canada document from federal finance minister Jim Flaherty made infrastructure a priority. Yet governments face huge bills for health, education and income support. Infrastructure, once a big-ticket item, earns fewer votes nowadays. Meanwhile, Canada is awash in saving. Canadians are aging and seeking to secure their retirements. Cash is flowing into corporate pension plans. Millions of individuals contribute to RRSPs. Huge assets are building in the Canada and Quebec Pension Plans and government-worker funds. This burgeoning saving is a major driver behind Canada’s net flow of funds abroad — more than $30 billion annually since 2004.governance and public institutions

Cutting Through Pension Complexity: Easy Steps Forward for the 2010 Federal Budget

Ottawa has an opportunity in the 2010 Federal Budget to improve retirement saving prospects for many Canadians. In a paper released today, the author outlines straightforward, no-regrets ways Ottawa can facilitate more saving and make cost-effective risk-pooling available to the majority of Canadians in defined-contribution (DC) plans and registered retirement savings plans (RRSPs).Pension Papers, Financial Services, defined-benefit (DB) plan, defined-contribution (DC) plan, registered retirement savings plan (RRSP)

Disarmed and Disadvantaged: Canada’s Workers Need More Physical Capital to Confront the Productivity Challenge

Canadian workers have enjoyed less robust investment in plant and equipment than their counterparts in the United States and other major developed countries over the past 15 years. And notwithstanding Canada’s relative economic resilience through the recent slump, the per-worker investment gap vis-à-vis other countries appears to have widened. The authors say if this pattern continues, Canadian businesses will continue equipping their workers less well than those in other countries, a setback in the quest for rising living standards in the coming expansion.Economic Growth and Innovation, Canadian workers, business investment per worker

Near Hits and Big Misses: Canada's 2009 Fiscal Accountability Rankings

Canadian governments are projecting large amounts of red ink in their 2009 budgets. Notwithstanding the impact of the economic slump on government finances, it is natural for Canadians to ask whether this new borrowing is partly the result of insufficient fiscal discipline during the good times, and whether the actual outcomes will be worse than the projections.fiscal policy, Canadian federal, provincial and territorial governments fiscal accountability rankings