One of the reasons I consider Stephen Harper to be best Canadian Prime Minister in my lifetime was his willingness to go out on a limb for politically problematic but beneficial reforms. One such policy was gradually raising the retirement age in the Canada Pension Plan (CPP) from 65 to 67.
Because this was to be phased in gradually over time, it didn’t have an immediate impact on the bottom line of the federal government. As a result, it didn’t seem like a big deal, but it is. It has a huge effect on something even larger, Canada’s unfunded liability burden. While Canada’s federal debt is $616 billion as I write this, Canada’s unfunded liabilities are measured in the trillions of dollars. One reason this amount is less talked about is that it is not money that has already been borrowed. It is the tally for promises made, but not yet paid. A big part of this total comes from promises made to future retirees by the CPP.
The good news is that a relatively small modification to government promises can have an outsize effect on how much the government owes in the future. Think of this as a pivot point or a fulcrum that you can use to move a large boulder with a lever. One such pivot point is the retirement age. Raising it by a couple of years can have a big effect in the unfunded liability column. While such a change doesn’t make the CPP solvent for all time (only raising Canada’s birth rate can do that), it is an important step in the right direction. By raising the retirement age by two years, Harper saved Canada untold billions of dollars and pushed the insolvency date for the CPP much further into the future.
And because it was to be phased in gradually over time, Stephen Harper was able to implement it relatively easily. Perhaps this is why conservatives did not hail it as a great reform like we should have. We shrugged, taking Harper’s leadership for granted. As a result, we made it easy for Justin Trudeau to backtrack on it.
That Justin Trudeau is reversing this beneficial change to Canada’s entitlement system shows how shallow he really is. Say what you will about Jean Chrétien (and there is a great deal negative that can be said about him), Chrétien was wily enough to know a good policy when he saw one. While he may have promised to repeal the GST and renegotiate NAFTA when he campaigned against Mulroney and Campbell, he never really meant it. His method was to get all the political benefit by publicly opposing these measures while owning all the benefit from these wise policies when he broke his promises.
In the real world, a Machiavellian schemer is usually better for a country than a glib underwear model. Of course, an uncharismatic but steadfast reformer is better still.