Improving Canada’s retirement income system

When our government develops policy we identify and focus on emerging priorities.

We do this knowing that there are needs of all kinds, in all parts of the country.

We do our best to reconcile these needs fairly and we aim to maximize the economic return on taxpayer dollars for the benefit of the greatest number of Canadians.

Much has been said in the past few months about the strength of our retirement income system which, as we know, has a lot of moving parts.

Any changes made to the system have repercussions now and in the future, in terms of who benefits and who pays – and to what degree.

Our retirement income system has evolved over the years to a point where it carefully balances private, individual and public risk and responsibility.

In the view of many independent experts, it is, on the whole, a fairly strong system and our government has taken strong action to improve it.

In October of last year, following a cross country consultation process the government announced the following pension reforms for federally-regulated pensions:

  • Enhance protections for plan members.
  • Reduce funding volatility for defined benefit plans.
  • Make it easier for participants to negotiate changes to their pension arrangements.
  • Improve the framework for defined contribution plans and for negotiated contribution plans.
  • Modernize the rules for investments made by pension funds.

    With the passage of the Budget and pending regulatory changes under current statutes including the Bankruptcy and Insolvency Act, these reforms are enhancing a number of improvements already made by this government to strengthen retirement income for our seniors.

    We have increased the age limit for maturing pensions and RRSPs to 71 from 69.

    We have allowed more flexible phased retirement arrangements under defined benefit pension plans.

    We have also increased the pension surplus threshold to 25 per cent from 10 per cent for defined benefit pension plans.

    These measures have built on the steps we have taken since 2006 to ease the tax burden on Canadian seniors, including more than $2 billion in annual tax relief to seniors and pensioners.

    Examples of this significant tax relief include increasing both the Age Credit amount and the Pension Income Credit amount and allowing pension income splitting for Canadian seniors.

    We have also introduced new and innovative ways to save, building on the nearly $2 trillion that Canadians have invested in RRSPs, RRIFs and registered pension plans.

    The introduction of the Registered Disability Savings Plan, and improvements to Registered Education Savings Plans, are just two examples.

    The single most innovative savings vehicle since the introduction of the RRSP, the Tax-Free Savings Account, is another.

    The TFSA is designed as a general-purpose savings account flexible enough to be used for any savings objective – including saving for retirement.

    With these measures we have improved the retirement income system in Canada and we will continue to work cooperatively with employers, current and future pensioners and all levels of government to ensure that the system continues to meet Canadians needs.

    I want to thank those of you who took the time to share your views on pension reform during the consultation period. A number of you, including local reps from CARP, union associations, members of our investment community and concerned seniors either participated in the cross country consultations or met with me directly. Many of you continue to provide advice which I am happy to pass along to my colleague the Minister of Finance.

    Your ongoing input on federally-related issues ensures that when setting priorities, our government will head in the direction Canadians wish to go.

    If you have any questions or comments on this or any other federally-related matter, don’t hesitate to contact me at [email protected] or at 470-5075.

    Ron Cannan is the MP for Kelowna-Lake Country. 

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    About the Author

    The Honourable Ron Cannan was first elected as Member of Parliament for Kelowna-Lake Country in January, 2006. He was subsequently elected in the 2008 and 2011 federal elections. He is a member of the Conservative Caucus.

    On September 13th, 2012 Ron was summoned to be a member of the Queen’s Privy Council for Canada and will provide advice to the Government as a member of the Priorities and Planning Sub-Committee on Government Administration.

    Ron successfully uses his experience and knowledge as a long-time Kelowna City Councillor and regional government representative to be an effective and enthusiastic champion for his riding and his constituents.

    His greatest satisfaction comes from helping local organizations and citizens obtain the support they require from Ottawa. 

    He is also dedicated to doing what it takes to ensure that the growing and vibrant communities in his riding continue to thrive and prosper.

    He is proud of the partnership and cooperation between federal, provincial and municipal governments which have resulted in significant infrastructure projects including upgrades to Highway 97, expansion of the Kelowna International Airport, a new horticulture strategy for fruit growers, obtaining a full service passport office for Kelowna and addressing critical economic issues such as labour skills shortages.

    He works closely with the local Chambers of Commerce and once a year arranges meetings for the Chamber with Cabinet Ministers and senior policy staff in Ottawa to move forward important local issues such as crime prevention and labour skills shortages.

    He is also an ardent champion for important community initiatives including homelessness, mental health, women’s resources, and support of arts and culture.

    On Parliament Hill, Ron has been a member of the Standing Committee on International Trade since 2006 supporting initiatives which will broaden the economic opportunities for local businesses and businesses Canada-wide.

    In previous parliamentary sessions Ron has been a member of the Standing Committee for Government Operations and Estimates, Veteran’s Affairs, Human Resources and Social Development, the Scrutiny of Regulations Committee, and the Standing Committee for Fisheries and Oceans.

    Ron is also involved in a variety of inter-parliamentary organizations: he is Vice Chair of the Canada-US Inter-Parliamentary Group, and a member of the Canada-Taiwan Friendship group.

    As Chair of the Conservative Wine Caucus, Ron works with his colleagues across the country to promote the wine regions of Canada.  Ron tabled Motion 218(formerly Motion 601) which supports direct to consumer purchasing of Canadian wine. His motion became Bill C-311, sponsored by MP Dan Albas, seconded by Ron, which was passed into law on June 28th, 2012.

    Prior to entering politics, Ron developed a diverse business background as a small business owner and had several years experience in marketing and sales management working with corporations including Coca-Cola, Costco and Corus Entertainment.

    Very active in his community, Ron has been a Director for both the Central Okanagan Regional District and the Central Okanagan Hospital Board. Ron also served on the Okanagan University College Access to Training Advisory Board, the Glenmore Elementary School Parents Advisory Council, and the Kelowna Christian School Fund Raising Committee. He was co-founder of the Okanagan Volunteer Festival. Currently Ron is a member of the Sunrise Rotary Club of Kelowna and, along with his wife Cindy, was the honorary Chair of the 2012 Canadian Cancer Society Daffodil Ball.

    Ron lives a family-oriented and active lifestyle with his wife Cindy. He is the proud father of three daughters and grandfather to three grandsons. His hobbies include music and sports.

    The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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