Thursday, February 23, 2017
The economic Circumstances of Canadian Seniors
In February of last year, the Broadbent Institute put out a report “An Analysis of the Economic Circumstances of Canadian Seniors” (pdf file) written by Richard Shillington of Tristat Resources.
The following are the conclusions reached by the Institute:
While the situation for many Canadian seniors is much improved compared to the late 1970s, there is no justification for complacency as trends of the last several years and projections into the future point to a deteriorating situation for their economic security.
Poverty rates for seniors have been trending up since 1995. Rates remain unacceptably high for single seniors—especially women—and the worsening trends in pension coverage point to further increases in poverty in the future. The GIS is the most effective federal mechanism in the short term for reducing the poverty rate and the impact of poverty on seniors, and it can be targeted at senior individuals who need it most.
The data on the retirement savings of Canadians currently nearing retirement age is unequivocal. A substantial proportion of middle-income Canadians without an employer pension plan will face a dramatic drop in living standards during their retirement years. While this report does not deal in detail with possible programmatic remedies, it demonstrates the urgent need to address this situation.
The panoply of public policies offering “voluntary” options for saving—such as RRSPs, TFSAs, group RPPs, and the more recent Pooled Registered Pension Plans—have demonstrated their inadequacy to address the shortcomings in declining workplace pensions and a Canada Pension Plan with limited benefits. These results suggest an important role for incentives to expand workplace pensions (particularly of the defined-benefit variety) and to enhance benefits of the Canada Pension Plan.