Expand the Canada Pension Plan replacement rate to 50 per cent of earnings. Cap annual contributions to registered retirement savings plans at $22,000. Establish a public agency to administer terminated pension plans. Create a single-payer pharmacare plan for all of Canada.
These are just a few of the suggestions put forth by the Canadian Centre for Policy Alternatives’ 2018 alternative federal budget.
The expanded CPP replacement rate would be up to 114 per cent of yearly maximum pensionable earnings, according to the alternative budget. It also recommends indexing old-age security benefits to the growth of the average industrial wage, increasing the guaranteed income supplement top-up for single seniors and couples by $1,000 and raising the income exemption by $3,000 for both groups. In addition, it suggests expanding the income exemption for the supplement by making the first $1,500 in CPP benefits exempt. Those actions would reduce poverty rates among seniors by 30 per cent, according to the think-tank.
For its recommendation to cap annual contributions to RRSPs, the think-tank notes the move would only affect those earning more than $126,000. It suggests the savings could go towards indexing old-age security to the average industrial wage and salary rather than the consumer price index.
It also recommends establishing a public agency to administer terminated pension plans and restoring the CPP death benefit the level it would have reached in 2017 if the government hadn’t reduced and frozen it in 1998.
“While the economy enjoyed a surprise jolt in 2017, that strong performance is not expected to last, and poverty and inequality remain at stubborn levels,” said David Macdonald, senior economist at the Canadian Centre for Policy Alternatives, in a news release. “It’s crucial we make the most of good economic news and invest in key programs to maintain forward momentum. It would be a mistake to fall back on the old habits of deficit reduction, austerity and an over-reliance on the private sector for guiding new growth.”
Additional action points in the alternative budget include allocating $11.5 billion annually to create a single-payer pharmacare plan for the entire country, as well as the development of pay equity legislation and an investment in childcare support to help increase the participation of women in the workforce.
“The government has work left to do to fulfil its promises of an inclusive economy, access to pharmacare and take action on catastrophic climate change,” said Macdonald. “This isn’t the time to delay. Canadians are getting of tired of asking, ‘Are we there yet?’”