OTTAWA, Dec. 20, 2013 /CNW/ - So why would a bunch of physicians want to
join the actuaries, accountants, politicians and all those others now
locked in debate about the future of the Canada Pension Plan?
The reason is very simple. Poverty will make you sick.
Physicians have known for some time that social determinants such as
housing, nutrition or income affect health outcome of their patients.
It is worth repeating that of every five dollars we spend on health
care, one can be attributed to social determinants or living conditions
that affect people's wellness.
This is why an adequate and stable source of income for Canadians in
their retirement years is so important for their own health as well as
the health of our health care system. Your financial health affects
your overall health, and both should be part of a national seniors care
strategy as called for by the CMA and others.
Like most of its industrial peers, Canada has a greying demographic
estimated to rise to 23% of population by 2030, about double the
percentage in 1990.
We would urge federal, provincial and territorial finance ministers to
think well beyond the immediate costs of an enhanced CPP and how to use
this public asset to address the growing rise of poverty among the
At first glance, there may not be a compelling reason for Canadian
policy makers at present to use the CPP as a weapon against poverty
among seniors. After all, Canada has a fairly respectable poverty rate
among its elderly at 6.7% —third best among its OECD peers.
But let's play actuary for a moment and look behind those numbers.
As the Conference Board of Canada notes, after 20 years of reductions,
Canada's poverty rate for the elderly has been climbing between the
mid-1990s and the late 2000s from 2.9% to 6.7%. A worrisome trend, as
the Conference Board notes.
Pensions as a proportion of disposable income among Canada's seniors
more than doubled between 1980 and 1996 thanks to the accumulated
growth of public and private retirement income plans in the postwar
But now that the defined benefit pension plan is an endangered species,
particularly in the private sector, and 60% of Canadians have no
private pension plans, we likely won't see that kind of senior wealth
for some time. Finance ministers at both levels of government should be
thinking about what's ahead.
We know Canadians are thinking about it, a lot. Canadians are rightly
concerned about their health care as the country's population ages. In
a public opinion survey done for the CMA last summer, 83% of
respondents said they were concerned about their health care in their
retirement years. Just as we as a society have learned to think about
environmental consequences while we grow our economy, we should also be
factoring in health in every important policy decision. Policy makers
should start looking at the health system beyond disease treatment and
think about prevention. Prevention can pay a fiscal dividend. So can
improved social and economic conditions.
The CPP was once a minimalist pension plan with a contribution rate of
just 1.8% — inexpensive but inadequate and actuarially unsound. After
its 1996 reorganization into one of the world's best public plans, the
contribution rate was set at 6% in a series of phased increases to the
current 9.9% by 2003. There were no tremors in the economy.
The time has come to make the CPP even better equipped to protect
Canadians. There is no reason why Ottawa and the provinces can't come
up with a non-disruptive transition over several years. All that is
needed is a spirit of cooperation.
The Canadian Medical Association (CMA) is the national voice of Canadian
physicians. Founded in 1867, the CMA is a voluntary professional
organization representing more than 80,000 of Canada's physicians and
comprising 12 provincial and territorial medical associations and 60
national medical organizations. CMA's mission is to serve and unite the
physicians of Canada and be the national advocate, in partnership with
the people of Canada, for the highest standards of health and health
SOURCE: Canadian Medical Association
For further information:
Senior Advisor, Communications and Public Outreach
Tel: 613-731-8610 ext. 1266