Dodge Advises Canadians Must Save More Now for Retirement
Research Paper Supports Ontario’s Push for Enhanced Canada Pension Plan
A new research paper released today by David Dodge, former Governor of the Bank of Canada, and Richard Dion, Senior Business Advisor at Bennett Jones LLP, stresses that Canadian households need to save more now to support future economic growth and maintain a satisfactory standard of living in retirement.
The paper examines the adequacy of future retirement income for Ontarians and Canadians. It concludes that:
- An increase in the Canada Pension Plan (CPP), financed by appropriate premiums, would be an efficient way to increase household savings and to provide for higher retirement incomes.
- The longer-term benefits of higher potential future economic growth and more adequate retirement incomes would be greater than the short-term costs of marginally slower economic growth due to a CPP enhancement.
- The current system of incentives for voluntary retirement saving may need to be supplemented by some mandatory elements to effectively enhance the level of household savings going forward.
Strengthening Ontario's retirement income system is part of the government's economic plan that is creating jobs for today and tomorrow. The comprehensive plan and its six priorities focus on Ontario's greatest strengths - its people and strategic partnerships.
- David Dodge, O.C. is Chancellor of Queen’s University and a Senior Advisor at Bennett Jones LLP. He is currently the H. Ian Macdonald Visiting Economist for the Ontario Ministry of Finance. He is the former Governor of the Bank of Canada, and held several senior positions in the federal government, including Deputy Minister of Finance.
- Richard Dion provides economic analysis and forecasting for Bennett Jones LLP. He has worked as an economist for the Bank of Canada for over 30 years in various departments, the Department of Foreign Affairs and International Trade, and Energy, Mines and Resources Canada.
- The 2014 Ontario Budget will be released on May 1.
“The paper released today by David Dodge confirms that there is a need to encourage savings to ensure that people, especially those in the middle-class, have a more secure retirement. Ontario has been advocating for an enhancement to the Canada Pension Plan to bolster people's retirement savings. So far, the federal government is refusing to act, so our government will move forward with a made-in-Ontario solution.”