Source: The Canadian Press

The drive to quickly and radically reform the country’s pension system is fading away.

Alberta’s newly minted finance minister suggested Tuesday that governments should wait a decade before deciding on major changes. Ted Morton argued for an “incremental” approach that would see policy-makers use regulations to make things easier for the private sector to lead the way for now.

His suggestions are a major shift from Alberta’s previous stand that pension reform is urgent, and that a voluntary supplement to the Canada Pension Plan is probably the best approach.

Morton also rejected proposals for a mandatory expansion of the Canada Pension Plan as a way to help retired people make ends meet. A bulked-up CPP would only exacerbate the problems of today’s system and foist a bigger burden on young people to support the growing numbers of seniors, he said.

“I would suggest it would be a very hard sell in this province. And I know it’s shocking, but I would probably not be the best person to sell it.”

In response, Ontario’s finance minister welcomed Alberta to the go-slow camp, and proceeded to state that federal and provincial ministers are not in any position to make firm decisions on pension reform this spring.

Dwight Duncan said he has always urged a “cautious” approach to pension reform, and now Alberta is singing the same tune, as is the federal government.

Still, Duncan added that he won’t let Alberta’s objections eliminate the option of expanding the CPP so that all Canadians receive bigger government benefits when they retire.

“Alberta is entitled to its position, and Ontario and others are entitled to their positions,” Duncan said in an interview. “Just because Alberta says it doesn’t want to do something doesn’t mean that Ontario is necessarily going to agree, or take it off the table.”

He also said a 10-year trial of letting the private sector develop solutions for Canadians’ inadequate savings is too long.

“Pension retirement issues have to be talked about now,” Duncan said in a speech to a conference of the country’s top thinkers on retirement income.

The conference was convened in the hopes of influencing and informing federal and provincial finance ministers who had committed to narrowing down their options by this spring or early summer.

Alberta and British Columbia have both threatened to develop their own provincial or regional supplements to the CPP.

Their threats, as well as the fragility of savings in the wake of the global financial crisis and the erosion of many company pension plans, prompted a drive to develop a national solution. All three federal parties have set their sights on pension reform as a major issue for the next election.

But now that financial markets are recovering and both Alberta and British Columbia have made noises about waiting for reform, the urgency has gone, said Jack Mintz, the University of Calgary economist who organized the conference.

“You do get the feeling that B.C. and Alberta have backed off. And they were the leaders,” said Mintz, who has been a key adviser to governments on pension issues.

“There’s still interest in doing some things. But in a Canadian way. Incrementally.”

While a consensus appears to be forming among finance ministers about the need to proceed slowly on reform, experts warned that complacency would be unwise, given the droves of baby boomers nearing retirement.

Waiting 10 years would be “pretty foolhardy,” said John Crocker, president of the Healthcare of Ontario Pension Plan.

HOOPP reported gains of 15.18% in 2009, but Crocker said recovering financial markets don’t solve the fundamental problems in Canada’s retirement system. Too many people are not covered by company pension plans, he said, and that trend is getting worse, not better.

Pension expert Jonathan Kesselman warned that pension reforms take decades to implement fully. So delaying tricky decisions just makes for harder decisions later on.

“Coming back in 10 years is delaying … by 10 years any movement toward 40 off years of concluding this big reform,” Kesselman, from Simon Fraser University in Vancouver, told the conference.

However organized labour, which wants to see a doubling of the Canada Pension Plan so that everyone’s post-retirement income is raised, has not given up hope.

Federal Finance Minister Jim Flaherty has not yet spoken definitively on what direction Ottawa wants to take, union experts say, and provincial positions are not written in stone.