Tuesday, May 20, 2014

Wynne pension plan bad for low-income earners: Maclean’s

In 2011, the Ontario Liberals missed a majority by one seat. This year, Kathleen Wynne’s election strategy is to campaign from the left, squeeze out the NDP and win that coveted majority.

Wynne has done nothing progressive so far, except to deliver big promises on top of broken ones.

Far from progressive

But her actions have been far from progressive. Over the past 2 years, her party has made numerous cuts to the poor and disabled. Welfare and disability rates have also been eroded by inflation over the past 11-year Liberal reign.

On top of this, she is borrowing $2.4-billion every year to pay out to the rich in corporate tax cuts that don’t create jobs. What makes these tax cuts doubly unnecessary, is that Canada has the lowest corporate tax rate among all major economies.

Pension plan problems

Now it turns out Wynne’s disregard for low-income earners extends to her pension plan according to an economic analysis from Maclean's.

With a low income threshold of $3,500 — the amount of money a person makes a year before being required to pay into the fund — low-income retirees stand to lose $1 for every $2 they receive due to a reduction in the federal Guaranteed Income Supplement.

This means low-income earners will be paying more in payroll taxes than they get back in benefits. This would “ultimately mean that Ottawa gets to spend less on Ontario seniors, while the province’s poorest workers pay more.”

Actuary Fred Vettese, who did the analysis, said the threshold needs to be raised to $25,000 to eliminate this disparity.

Conclusion

Like Wynne's 1% hike to welfare and disability rates — which amounts to an actual cut because it’s lower than the inflation rate — the Liberal pension promise is far less progressive than it appears.

This is similar to the Chretien Liberal EI cuts which make many low-income earners pay for benefits they are not eligible to receive.

No comments:

Post a Comment