Social Policy

Canada Pension Plan reform: A Northern perspective

Canada’s finance ministers meet June 20-21 in Vancouver to try to reach a consensus on Canada Pension Plan (CPP) reform. So far, Northern politicians have said little on the issue heading into the meetings, but officials need to take into account Northern Canada’s unique situation in terms of demographics and cost of living when considering whether the current plan can provide a comfortable retirement for their residents.

Dwayne Wheeler of the Yukon Council on Aging says CPP monthly payments don’t meet Yukon retirees’ needs. The one “saving grace” for seniors whose only source of income is CPP and seniors’ supplements is the territorial seniors’ social housing program that subsidizes rents. Seniors lacking other income or families that can provide them with living space face a difficult financial situation, Wheeler says.

How much retirees collect from CPP varies by circumstance but, on average, seniors will collect $665 with a maximum payout of $1,092 per month this year. Federal old age security and guaranteed income supplement payments of between $1,000 and $1,800 can top up CPP amounts.

The Conference Board of Canada estimates that the percentage of Yukoners at retirement age will rise to 20.7 per cent of the population by the year 2031.

Wheeler says seniors trusted the government would ensure that workers and employer contributions to CPP would result in enough money for a decent retirement, but believes now that “somehow that trust has been compromised.” He questions how well the CPP investment board has managed the fund over the years.

In Nunavut, people depending solely on CPP face greater financial uncertainty because they receive payments based on national averages while goods cost about twice as much as the rest of Canada. In addition, their landlords charge the highest rents in the country.

Northern demographic data contains statistical extremes that territorial officials working on possible CPP reform must consider if the plan is to meet their residents’ needs, now and well into the future. Nunavut’s young population, high birth rate, and low life expectancy results in Canada’s lowest proportion of people over 65 in Canada at 3.3 per cent compared to the national average of 14.9 per cent.

The Northwest Territories claims Canada’s second youngest population and second highest birth rate, placing its percentage of senior citizens as the second lowest in Canada.

Yukon, with a fertility rate closer to the rest of Canada, leads the country in its proportion of people of working age, accounting for 73 per cent of the population, according to Statistics Canada. People over 65 make up 10.9 per cent of Yukon’s population — the highest percentage of the territories. The Conference Board of Canada estimates that the percentage of Yukoners at retirement age will rise to 20.7 per cent of the population by the year 2031, meaning that the need to address an aging population in Yukon is more time sensitive than in the other two territories.

The Government of Yukon did not want to comment on the issue ahead of the Finance Ministers’ meeting on the subject later this month. The Governments of the Northwest Territories and Nunavut did not respond to questions about Canada Pension Plan reform.◉


Photo: Yukon Housing Corporation’s Front Street Seniors’ Residence in downtown Whitehorse was officially opened on March 10. Credit: Brian Pehora

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