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:
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.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.