Saturday, January 28, 2012

The Pension debate

Na├»ve citizens might have thought a significant issue of this nature affecting the retirement incomes of just about everyone would have been discussed extensively here in Canada beforehand – perhaps even debated in our antiquated parliament! Apparently. Harper just couldn’t wait to debut his super-secret plan to gut pensions (in mysterious, as yet undisclosed ways) while self-righteously scolding spendthrift world leaders at an elite Swiss resort. The truth is, a solid majority of Canadians in their peak earning years do not or cannot afford to make annual contributions to the primary retirement savings instrument (RRSP) and only 12% of those in their 40s make the maximum allowable contribution. Of those in their 50s, only 14% make the maximum contribution.
Is the fog coming off the mirror yet? The Harper plan for "prosperity" is to rob seniors of their past tax payments and give it to the wealthiest portion of the population. Source:

In order to sell this plan to the Canada people Harper will use all of the tools at his disposal.  For disinformationalists such as Harper, the overall aim is to avoid discussing evidence which cannot be broken by truth, but at all times, to use clever deceptions or lies to make select links seem weaker than they are, create the illusion of a break, or better still, cause any who are considering the chain to be distracted in any number of ways, including the method of questioning the credentials of the presenter. Please understand that fact is fact, regardless of the source. Likewise, truth is truth, regardless of the source.

Here's the full text of the memo sent out as speakers points to counter the growing online opposition by progressives to Harpers plan to destroy our pension system. The text from the memo is in italics and my comments are in bold and non-italics.

From: Alerte-Info-Alert [PMO]

Sent: Friday, January 27, 2012 11:46 AM

Old Age Security
Media are speculating that the federal Government may make changes to Old Age Security.
The following comments use the following two rules of disinformation
Invoking authority and the Rule of Become incredulous and indignant,

Our Government is committed to ensuring the retirement security of Canadians.

The Harper Government will ensure that seniors maintain ALL the benefits they currently receive.

To be clear: there will be no changes to the benefits seniors currently receive.

(It would appear to me that the writer of this statement assumes the reader is almost illiterate and because of this the writer has to repeat the point. It also means to me that there will be changes coming down the road, after we see how the public buys the idea that taking away old age security of younger Canadians is ok)

The following comments use the following rule of disinformation Establish and rely upon fall-back positions. (In this case, the fallback position is that the government will give proper notice, etc.) Done properly, this can garner sympathy and respect for 'coming clean' and 'owning up' to your mistakes without addressing issues that are more serious.

We will ensure any changes are done with substantial notice and adjustment period and in a way that does not affect current retirees or those close to retirement, and gives others plenty of time to adjust and plan for their retirement.

(Note they have not defined substantial notice and adjustment period or what is meant by those close to retirement, and they are not about to because they want this done and over before the next election

The following comments use the following rule of disinformation Change the subject. The government is trying to find a way to side-track the discussion in hopes of turning attention to a new, more manageable topic. This works especially well with companions who can 'argue' with you over the new topic and polarize the discussion arena in order to avoid discussing more key issues

In Canada, there are two important programs that provide financial support to older Canadians: CPP/QPP and OAS. (Notice the switch of topic from Old Age Security to the Canada Pension

CPP is funded through premiums that working Canadians pay with each paycheque and is on a secure and sustainable path. It does not need to be changed.

The following comments use the following rule of disinformation Fit the facts to alternate conclusions

OAS is funded primarily through taxes on working people and is unsustainable on its current course. For example: (Notice how they build the facts to lead to the conclusion they want you to draw)

      • The number of Canadians over the age of 65 will increase from 4.7 million to 9.3 million over the next 20 years.
      • The OAS program was built when Canadians were not living the longer, healthier lives they are today.
      • Consequently, the cost of the OAS program will increase from $36B per year in 2010 to $108B per year in 2030.
      • Meanwhile, by 2030, the number of taxpayers for every senior will be 2 - down from 4 in 2010.

If we do nothing, OAS will eventually become too expensive and unsustainable.

Alternative analysis from the galloping beaver and The Bulldog are interesting reads at this point

The Old Age Security only consumes about 2.41 per cent of GDP, much lower than in most countries. In 2031 at the top of the baby boom retirement demographic, the OAS will consume only 3.14 per cent of GDP. That’s a lot of money, but it is not a catastrophe. Source: The Bulldog by Ken Gray

The Cons' estimated total cost is about $108 billion. But based on Statistics Canada's medium-case demographic estimates, seniors ages 65 and 66 will make up only 11.5% of the total population aged 65 and up as of 2031.

So if OAS is relatively evenly applied across the age spectrum, the savings from pushing back the retirement age for Canadians in general will amount to 11.5% of $108 billion - or just over $12 billion per year.

Then he takes aim at the real plan. The Harperites promised that, once they have balanced the budget, as long as you have a large enough income, you can increase the amount of money you put into a Tax-Free Savings account from the current $5,000 to $10,000 annually.

At the same time, the Cons plan to push through general income splitting and increases to tax-free savings accounts. And those plans - targeted squarely at large-single-income households and those wealthy enough to have $10,000 to sock away every single year - will cost...just under $12 billion per year. And unlike the Cons' numbers for OAS, that's without taking into account any growth in the size of the tax base in the meantime. 

Just so we're clear here, the cost of the Harper frat-boys' plan to allow income splitting in high-earning-single-income households and to double the amount that those with a spare ten-thousand bucks laying around can shelter from interest and investment income taxes is about the same as would be saved by forcing seniors to delay an old age benefit until they reach aged 67.  Source: .

The following comments use the following rule of disinformation Invoking authority

Our Government will act to protect OAS.

We will not put the financial security and well-being of our seniors at risk.

We will take balanced, responsible, and prudent action to ensure OAS remains sustainable for future generations of Canadians.

The following comments use the following rules of disinformation False evidence, Manufacture a new truth, and Invoke Authority. Citing their own expert(s), group(s), author(s), leader(s) with  testimony which concludes favorably.

Background - Retirement Security
Since 2006, we have:

      • Increased the Guaranteed Income Supplement for the most vulnerable seniors
      • Introduced pension income splitting and increased the age credit
      • Introduced innovative new programs such as the tax-free savings account and the PRPP to help Canadians save for retirement.

As a result of our actions, seniors can individually earn approximately $19,000 per year or $38,000 as a couple before paying federal taxes.

What the government doesn’t say:

According to the Department of Finance Tax Expenditure and Evaluation Guide, savings held in Tax Free Savings Accounts lowered Canadians’ taxes by about $45-million in 2009 and $155-million in 2010. The Conservative Party’s plan to double contribution room from $5,000 a person per year to $10,000 is estimated by them to cost only $30-million Source : How TFSA expansion will hit future tax revenues Source: Kevin Milligan Globe and Mail Blog  Posted on Thursday, April 7, 2011 6:50PM EDT

In the following items the government uses the following rule of disinformation

Silence critics. (If the above methods do not prevail, consider destruction of their character), False evidence (Whenever possible, introduce new facts or clues designed and manufactured to conflict with opponent presentations) Emotionalize, Antagonize, and Goad Opponents. As they cannot do anything else, they will chide and taunt their opponents to  draw them into emotional responses which will tend to make them look foolish and overly motivated, and generally render their material somewhat less coherent(

Lines to Define the Expected Opposition Attack
We know the Opposition will attack any adjustments to the OAS program.

We know their approach. It's the same tired (failed) approach to deficits and debt that led to the economic crisis in Europe.

The NDP prefers a "head in the sand" approach - ignore the problem until it is too late to save OAS benefits.

Their irresponsible, reckless, and dangerous approach to Canada's finances would put the entire OAS program at risk.

The NDP would put at risk the financial security of millions of middle aged working Canadians - all future generations - who are planning on OAS being there when they need it.

It demonstrates that the NDP is too dangerous for Canadians planning for their retirement.

Harper wants to frame the conversation about pensions with the idea that Canada will  have to take tough measures now or we will end up in a mess like the US or the European common market. This is the frame that the Conservatives will try to impose during this spring sitting of the House of Commons,  It's a powerful frame, and was largely responsible for Harper's majority election win, but this time I don’t think Canadians will be prepared to buy into his ideas.

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