The Key Problem We're Solving
Everyone needs enough money on which to live, during their retirement years.
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This is why in Canada we have:
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mandatory Canada Pension Plan (CPP) contributions deducted from every pay cheque;
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employer CPP contributions; and
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tax incentives - including Retirement Savings Plans (RSPs) and Tax-Free Savings Accounts (TFSAs)
Yet, even with these strategies, a great many Canadians are unable to accumulate enough money - during their working years - for retirement.
As a consequence, the Federal Government must provide financial support to many retirees. And, this accounts for more than $1 out of every $6 the Government spends.
In fact, the provision of financial support to retirees is the Government's largest expenditure. It currently costs $77 billion per year, and is increasing.
As a point of reference, this financial support for retirees equates to a COST of more than $5,000 per year - for each and every Canadian household.
And, it's not as if this support gives retirees much money on which to live. The 7.1 million seniors who receive financial support, get an average of just $10,697 per year, before tax.
So, many still experience considerable financial hardship. As just one example, 13% of unattached seniors live below the poverty line.
Unfortunately, this isn't the end of the problem. According to the Fraser Institute,
"Budget deficits and increasing debt have become serious fiscal challenges facing the federal and many provincial governments recently"
Since 2007/08, combined federal and provincial net debt (inflation-adjusted) has nearly doubled from $1.18 trillion to a projected $2.18 trillion in 2023/24.
This equates to $142,483 of net debt for each and every Canadian household.
And, we are required to pay interest on this debt. How much interest? Currently, $81.8 billion per year.
This interest burden itself equates to a COST of $5,346 per year for each and every Canadian household.
And, our level of debt is increasing - in large part as a result of the high cost of providing financial support to retirees.
The Good News
The good news is, we can SOLVE this huge problem. And, we can do it WITHOUT raising taxes or cutting government programs.
By making just one fundamental change, we can:
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ensure Canadians enjoy much higher levels of discretionary income during their working years;
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ensure they also have ample money on which to retire; and
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substantially reduce the amount the Government must spend to provide financial support to retirees (thereby freeing up enough money to pay off our national debt and eliminate the annual interest costs).
What is this one fundamental change? We refer to it as the BIGShift.
