Former Reform colleague questions Harper’s MP pension reforms

Tom Corbett and Stephen Harper once agreed on ‘pension pigs’—until actual retirement got in the way

Tom Corbett at his home in Kingston, Nova Scotia. (Photograph by Scott Munn)

Tom Corbett at his home in Kingston, Nova Scotia. (Photograph by Scott Munn)

There was a time, some 20 years back, when Tom Corbett had much in common with Stephen Harper. Both entered the tumultuous 1990s with bedrock conservative values, a strong Christian faith, and a contempt for big government and rich taxpayer-backed political pensions. Corbett was executive director of Ontarians for Responsible Government, a project of the National Citizens Coalition (NCC). He would later join the Reform party as a staff member in Ottawa after a meeting with Harper, then an ambitious young member of Parliament for the fledgling party. Among the NCC’s priorities were dispatching Ontario’s NDP premier Bob Rae from office, and a vocal campaign against “gold-plated” political pensions. Harper, like most of his fellow Reform MPs, was also a critic of fat parliamentary pensions, and they gained much political mileage from their refusal to sign onto the plan. Harper quit the Reform party in 1997 to lead the arch-conservative NCC, ramping up the lobby group’s campaign for political pension reform until his return to federal politics in 2002. It was a principled stand that Corbett admired, but much has changed in the intervening years.

Harper­—despite substantial reductions in MP pension entitlements that his party introduced in 2012—is eligible for an annual pension of $191,000, indexed to inflation, were he to retire in 2016 after 10 years as Prime Minister, says Jeff Bowes, research director for the Canadian Taxpayers Federation. In Corbett’s view, that makes Harper one of the political “pension pigs” the two men used to campaign against, both on Parliament Hill and in a hard-hitting media campaign sponsored in the mid-1990s by the NCC.

Since those days, Corbett has developed a more jaundiced view of official Ottawa. He considers Harper’s pension reforms mere tinkering—the average pension for former MPs stands at $59,307, the Treasury Board reports. “They call it the Ottawa bubble,” he says in an interview from his home in Kingston, N.S. “These guys don’t know what it’s like to live like the people who are paying their salaries.”

By contrast, 65-year-old Corbett, Harper’s former comrade-in-arms, scrapes by on combined Canadian Pension Plan (CPP) and Old Age Security (OAS) payments of about $1,000 a month, making substantially less in a year than Harper would clear in a month. It’s an extreme example of the income disparity that many retirees will face—those with the workplace pensions, versus some of the more than 60 per cent of working Canadians without. With only a quarter of tax filers contributing to retirement savings plans (RSPs), many are facing lean retirement years. Pensions—and the haves and have-nots—are a hot-button issue across the country, and nowhere more than in Ontario with an election under way and Premier Kathleen Wynne promising a mandatory workplace pension plan for most Ontarians without one.

Although Corbett has worked all his adult life, he never had a workplace pension. “For me, a job was always for something that I believe in,” he says. “The National Citizens Coalition paid good money and the Reform party paid me decent money, but those are the best-paying jobs I had. I actually worked for a lot of non-profit organizations; that certainly kept my income down quite a bit.” Paid employment is scarce in his neck of Nova Scotia, but he finds rewards in his volunteer pastoral work in churches and at the federal prison in Springhill.

If not for his 64-year-old wife’s income as a nurse, he says they would be in dire financial straits, not unlike many struggling retirees in their community. Before speaking with Maclean’s, Corbett was digging out and potting plants from his garden to give to a 66-year-old who sells them to augment her tiny pension. “She’s not the only one. I see people on a daily basis on slave wages at McDonald’s because they can’t afford to live on their pensions.” When his wife, Susan, retires next year, however, he says they will probably have to sell their home. They have plans to buy a wooded lot, build a cabin, grow their own food and live off the grid. He figures the $100,000 they might clear in the transaction, their retirement nest egg, leaves them luckier than many.

What especially rankles Corbett is that Harper’s government scuttled plans to expand the CPP, which currently pays a maximum of about $12,500 a year (even if the average CPP annual payout at age 65, for new retirees, is just $7,602). Harper’s stance that Canadians must do a better job of financing their own retirement puts him at odds with several provincial leaders and handed Ontario Premier Wynne a high-grade election issue.

While Wynne agrees with Harper that middle-income Canadians aren’t saving enough for their retirement, there is a profound divide over the solution. The Conservatives say there are sufficient retirement vehicles, including retirement savings plans and a proposed targeted pension for federally regulated workers where the sustainability of the plan would determine the payout and benefit levels. Wynne has proposed a mandatory contribution plan for the three million Ontarians currently without a workplace pension. It would run along the lines of the CPP, with workers and employers contributing up to 1.9 per cent of earnings. The end result would almost double the $12,500 maximum payout that CPP provides, though it would be a generation before the full benefit of the expanded program is realized. “Stephen Harper, when he retires, is going to have about 10 times that amount in his pension,” Wynne said, in full campaign mode.

Her election smear doesn’t sit well with federal Conservatives. The Prime Minister’s office left it to Finance Minister Joe Oliver to respond. “It’s obvious that the Ontario Liberal government is trying to divert attention from their dismal economic record,” Oliver said in an email to Maclean’s. “In contrast, our government has lowered taxes, created more opportunities for savings and created over one million jobs since the depth of the recession. It’s unfortunate that the Ontario Liberal government is going heavily into debt and planning to raise payroll taxes on employers and employees by $3.5 billion a year.”

Corbett recalls being so smitten with Reformers that he sought Harper’s advice about leaving the NCC for a job with the fledgling Reform. The two men met for coffee, and Corbett took Harper, at his request, on a tour of the Toronto NCC offices. “Four months later, I was in Ottawa [working for Reform] and two months later, [Harper] left to head up the National Citizens Coalition,” he says. It was under Harper’s leadership that the NCC’s “Operation Pork Chop” kicked into high gear, targeting federal politicians as pension pigs swilling champagne and feasting on troughs of money. But that was then.

Even with the Conservative reforms, political pensions remain far above the norm. Gregory Thomas, federal director of the Canadian Taxpayers Federation, says the Conservative initiative regarding political pensions, which, among other measures, will more than triple the amount of pension contributions MPs must make, “are substantial victories for taxpayers.” Still, he adds, the average final age for durable members of the MP pension plan is currently 90, “so they enjoy fully indexed income for far longer than they ever served in Parliament,” he said. “We would prefer matching taxpayer contributions to an MP’s RSP, up to the same limit that applies to ordinary Canadians.”

For Corbett, the volunteer pastor, the greater concern is with the poor and struggling middle-class pensioners who, he says, are sacrificed on the altar of corporate interests. “You have someone like Stephen Harper, the majority of his cabinet and over half of his MPs who call themselves Christians, but the policies these guys are implementing, they’re anything but Christian. They’re completely contrary to the teachings of Jesus Christ.”

He’s no fan of the free-spending Ontario Liberals, but he says that Wynne’s prediction of a looming pension crisis is on the mark. “I don’t know why people aren’t marching on Parliament Hill,” he says. “There’s going to come a time, I think, when people are going to get to where they can’t afford to be silent anymore.”


Former Reform colleague questions Harper’s MP pension reforms

  1. “Both entered the tumultuous 1990s with bedrock conservative values, a strong Christian faith, and a contempt for big government and rich taxpayer-backed political pensions.”

    Noooo sympathy.

    • Is it the “strong Christian faith” bit that got to you?

    • I must agree with your Emiilyone; I have no sympathy for the Tom Corbett who once had “bedrock conservative values,” and a “strong Christian faith,” either. Tom Corbett these days has also turned his back on the “Christian Religion” and now identifies himself as “a disciple of of Jesus Christ.” As I am quick to say these days, “Jesus saves, not Christianity;” there is a big difference between the two.

  2. It seems to me that an introductory course at the high school level in basic finance and investing would go a long way in helping our younger folk plan more wisely for their future. Expecting CPP and OAS and other taxpayer funded programs to provide all the money needed in retirement is a fool’s game.

    • Pension or welfare….those are the only two options.

    • That works well for some, but not all.

      The only way to ensure retirees do not end up in poverty is a properly funded pension plan.

      • Agreed.

        Wingers get their ideology into it instead of being practical though…and then we get a crazy quilt of programs.

    • You hit it on the button, Brian.

  3. Gotta admit, this article paints a horribly accurate picture of our future (non-existant) Pensions, for the next few generations, and how painfully skrewed the avg Canadian is going to be upon retirement,…
    Except, of course, for the all the gov’t, “gold-plated” MP(ig)’s, …, fattening themselves up, at the Taxpayer Troughs.
    …kinda makes me wonder why the avg canadians are ALL paying so much TAX to these goons, in the first place ?

  4. Another conservative destroyed by his own ideology. We should call it “The trouble with Kapuskassing.”

    • LOL yeah it wasn’t so funny when it happened to him.

      If he thinks he’s ‘going bush’ and off the grid as he ages, he’s got another shock coming.

      • He sure does. The body starts to wear out. It’s a good thing his wife is a nurse – he may well need her.

  5. Sure – there are lots of ways to do that – RRSP, TFSA, as well as non indexed savings and investments.

    Tell me how the 50% of Canadians who earn less than the median income (currently around $36000 per year) are supposed to put money aside for retirement when they are having enough trouble keeping a roof over their heads, clothes on their body and food on the table?

    Tell me how those folks who had good middle class incomes and had their jobs pulled out from under them after 20 years are supposed to put money aside? Particularly when they have had to take minimum wage jobs just to have some kind of income.

    Tell me how the millions who need food banks are going to save for their retirement?

    The philosophy of “every man for himself” is fine when the economy is healthy and unemployment is low. Our economy is nowhere near that. This is a time when we need to be working together, sharing what we have to make sure that we all have what we need to live. Instead, we have a government that funnels money to those who need it the least and tells those who have nothing that they should save for retirement.

    I saved and invested and I have a small RRSP. It won’t last for long, but at least I have a little cushion. I am also fortunate that I have an employer’s pension and so does my husband. But I’m one of the lucky ones. I had a job in the top 20% for most of my career and in the top 15% for 5 years (before it disappeared while I was on long term sick leave). I worry about those who were not so lucky.

  6. Fact is pooled plans are pooled scams. Isn’t just private, but also public and union pensions, all pooled plan scams.

    Anyone done a proper ROI on CPP that includes inflation, payouts for a 30-45 year contribution of employee and employer parts?

    If you did you would see the fraud. Today workers even pay far more in increases than retired people get, this years increase for retired and disabled was 0.9%, far below inflation and CPP taxes.

    In fact, if we DEMANDED all EI/CPP, employees and employers parts, employers pooled scams be placed in out LIRA the day it was earned, most of us would be retiring at 55 like a civil servant.

    Get your pensions in your name/account/control. So when the NorTel, GM and others pooled plans fail, you don’t get burned. We know governemtn unions get bailouts, like Canda Post, CUPE, Air Canada, GM and others… and we are taxed for it our our unborn get debt for it.

    Monitor your returns annually, save your own pensions…as who comes first? Taxpayer or governemtn unions and politics?

    In your name/account/control has lots of advantages, if your employer goes bust, it can’t be confiscated or devalued, you get to decide when YOU are ready for requirement and not wait until 65/67. Even in death, your spouse/estate gets the full value and no actuarial screwing. If I died, my wife gets a huge 100% roll over and no actuarial or spousal downgraded adjustments.

    Pooled plans are pooled scams. They don’t want you to know your actually annual pension growth and costs, and ROI….they scam you. If pooled money types want your money, they need to define to you the guaranteed annual return….every year you work…or you will find out after 40+ years of work, your pensions are not really that good.

    Hey, I found myself disabled at 54. CPP/disability pays $13k/yr, thats all you get for 36 years of pay in, and doesn’t even pay my taxes…. becuase I put my pensions into my name/account/control in TFSA, RRSP, LIRA, IRA…cash…. I get to keep my home. As you can’t live on pooled plan scams.

    Here is the real kicker. I put less in my RRSP that was put in CPP on my behalf, yet its monthly sustainable for 100 years dividends are 2.7 times more than CPP….

    I even quit jobs to roll over the company pooled plan to a LIRA/IRA. Sure saved me from Nortels screwing of pensioners. It already returns me twice as much more at 56 than if I had waited to 65 on the pooled plan.

    Pooled plans are pooled scams. Get your pension into your name/account/control as the rest is really a tax. CPP ROI is so pathetic, consider it a tax with a very low residual value.

  7. Imagine say at 55, add up all the money you contribute to pooled plans, be it CPP (including employers part), unused EI, company plans. Invest it annual for real inflation+2% for 30-45 years……

    Then compare the monthly sustainable dividends of such to the payouts they claim to give you.

    You will then realize you have been bamboozled.

    There is a reason pooled plans do NOT send you out annual growth inflation adjusted. Sure, the numbers go up, but far less than real inflation as its inflation taxed and probably poorly managed. Often like Nortel, CEOs get wild pensions from the plan but proper contributions were never made, so in effect employees subsidized executives and when NorTel went bankrupt pensions got devalued.

    In 1996, I rolled my Nortel pension to a LIRA, it now pays me 2 times more at 56 than Nortel said I would get at 65, and I didn’t get the write down as my LIRA is in my name/account/control. Not the only employer I quit/left as to roll over my pension into my control.

    They count on people not knowing the annual ROI with inflation. As pooled plans are pooled scams for 99% of us.

    Me, I always made sure my pension planning was in my name/account/control and in cash, RRSP, TFSA, LIF, LIRA or IRA. So I can define when I am ready to retire, no snivel servant telling me I have to wait until 67 to get a pathetic pension….while they get much more at 55.

    And if I dies, spouse/estate gets it all, no adjustments other than taxes much of which can be delayed with spousal roll overs and when the last of us die, donate it all to charity to reduce non-valued added hyper-taxations.

    Pooled plans, pooled scams. Get it in your name/account/control and learn how to invest it, you will NOT regret it.

Sign in to comment.