Making a pitch for a made-in-B.C. provincial pension plan

Shutterstock

Well and good, I suppose.

Last week’s Vancouver federal-provincial finance ministers meeting propelled the most meaningful change to the Canada Pension Plan (CPP) in a half-century.

The effort to build a more substantial, sustainable nest egg still lacks some details, but the overall outline appears to acceptably phase in improvements without precipitously injuring businesses as they contribute.

Part of me is relieved the process is under way.

Part of me wishes it had failed.

The drive stirring in Ontario for its own pension plan that provoked the CPP shotgun wedding last week might have been exactly the elixir for British Columbia – something Quebec has long managed, used as an influential economic instrument, and conferred as a distinct benefit.

There is something different from the rest of Canada about the evolving B.C. economy, workforce and demography that makes the creation of our own pension system intriguing, if not tantalizing.

Our resource economy of more-prominent organized labour is shifting into a knowledge economy of fewer unions and greater job changes, meaning more mobility and fewer pensioned careers. A provincial plan of a certain design could help offset that.

Many of our emerging industries are providing more contractual, project-based work.

A provincial plan could recognize that as a form of responsibly enforced savings.

And even though we no longer have mandatory retirement, we have been and will be a desirable locale for the retiree.

A tailored provincial plan could flexibly accommodate this.

Most critically, a plan could generate a useful pool of capital to help our economy transform, to serve our aspirations as a powerful lever in investment, and to develop regional expertise in such management.

Many pension experts reading this will wonder what has suddenly occupied my bloodstream, because there are many good reasons to simply fall into line nationally.

The administrative expenses can make the most bulbous bureaucracies seem comparably crisp and nimble.

The guesstimates of necessary revenue and expenses can make the back of a napkin seem comparably precise. And when a pension plan goes even slightly sideways, the credit consequences for the province are dire.

Yes, history has shown that the occasional government or 75 can take advantage of expedient capital pools to avoid onerous measures that might more rightfully pay for infrastructure.

There is, too, the not-small matter of the business role in the pension system.

Payroll taxes of any sort are hardly fun, but they could prove more volatile on a smaller-scale provincial plan.

We are witnessing a grand generational transfer of wealth, in this province in no small way due to real estate, but I wonder if we are building anything that the generation to follow will find as financially nurturing.

What I also wonder, though, is whether the federal-provincial deal extinguished an opportunity for a valuable debate in British Columbia.

Out of that might have come an innovative and homebrewed scheme that could have long down the road served to attract and retain workers and then retire them in more comfort.

A window closed on that last week, and I can’t help think we might regret it. 

Kirk LaPointe is Business in Vancouver’s vice-president of audience and business development.