Thursday, May 14, 2009

Dwight Duncan's retirement strategy: "I just don't look"

Today we learn in the Toronto Star that Ontario Finance Minister Dwight Duncan’s retirement “survival plan” amounts to “I just don’t look”.

I think Dwight Duncan’s retirement strategy as Ontario’s Finance Minister of “I just don’t look” is the very same as his predecessor’s strategy, that of Greg Sorbara, when it came to Sorbara sending a letter of support on Flaherty’s income trust tax that was predicated on the argument of tax leakage, a matter that Sorbara never even researched and took totally for granted as he caused $35 billion of Canadians’ retirement savings to evaporate......40% of whom are Ontario residents and taxpayers.....and Sorbara’s level of due diligence was “I just don’t look.”

In my own case, “looking” took but one phone call on the morning of November 1, 2006 to a former colleague in Bay Street (4 blocks south of Queens’ Park, for those in the Ontario government who don’t know) to whom I asked the question, “Whatever happened to that study on tax leakage that was commissioned during the Goodale round? Did it ever get published? What did it conclude?”

For those of you who are not from the school of “I just don’t look”, you can simply pick up the phone (the outgoing device on the top of all Ontario bureaucrats desks) and dial 647 505 2224, and I’d be happy to share with you the definitive study on tax leakage (I,e, the conspiract theory known as tax leakage) entitled “The tax revenue implications of income trusts”. Even lawyers like Sorbara and Flaherty should be able to comprehend what it means to have left out 38% of the taxes paid by income trusts. No formal financial training or calculator required. You just have to be willing to look, for once.

Hatching a survival plan for retirement - Business - Hatching a survival plan for retirement
May 14, 2009
James Daw

Ontario's minister of finance has a strategy for coping psychologically with the sorry state of his own retirement savings plan.

"I just don't look," Dwight Duncan confided yesterday to a gathering of pension lawyers, actuaries and administrators.

Duncan, at age 50, is near the middle of the baby-boom generation. He knows full well that he will be in much the same shape as two-thirds of voters.

Anyone who, like him, lacks an employer-guaranteed pension must depend on his or her savings to supplement modest Canada Pension Plan and Old Age Security benefits.

Those savings have been sharply eroded by scary investment losses in the past year. So it will be all the more difficult to match the income in retirement that a traditional pension plan would provide, should the sponsoring company survive the current recession.

Duncan and other members of the provincial parliament have 10 per cent of their pay contributed by the government to a registered retirement savings plan.

But even when he tops that up with 5 per cent of his pay, Duncan is putting aside less than would be contributed for the pension of a high-level civil servant.

A total of 15 per cent of pay is, however, more than most individuals in the private sector are putting aside for retirement, and Duncan says he is concerned about the low level of savings.

So he wants provincial and federal governments to talk about how to encourage Canadians to save more, and what additional incentives could be put in place.

"I think we have to look broadly at pension adequacy," he said, admitting, "I don't have a proposal."

He is counting on a May 25 meeting of provincial and federal finance ministers to kick off a national dialogue on a situation he expects will dominate political debate over the next decade.

"Our first plan is to start talking about it. The conversation is taking on a life of its own. A lot of people, particularly baby boomers, are aware that retirement is drawing near and are asking themselves, `Have I prepared adequately?' And we need to have some dialogue that starts with governments talking among themselves."

Meanwhile, he says most voters would not support his government putting up the $3.5 billion that would be required to backstop the province's Pension Benefits Guarantee Fund should General Motors of Canada not survive.

Premier Dalton McGuinty has already confirmed his government is not willing to do that. But Duncan told reporters the province has not considered the possibility of a court ruling that Ontario has some legal liability for failing to protect GM pensioners, who could see their benefits cut in half.

"We are focused on keeping GM viable," he said, while insisting that the viability of the company is closely intertwined with relieving the automaker of its heavy obligations for pensions and other post-retirement benefits.

"One of the key issues is legacy costs, and you cannot deal with keeping GM viable without dealing with the pensions," Duncan said in an interview.

The U.S. and Canadian governments have given General Motors Corp. and its Canadian subsidiaries until the end of the month to present a survival plan to qualify for loan guarantees.


Anonymous said...

Beautiful, Duncan does not look and Flaherty does not know where to look.  And these guys are Finance Ministers?


Anonymous said...

Yeah - just like McSQuinty. GET SOME GLASSES - DUNKY DOUGHNUT! You know, the kind that the taxpayers wear.

McSQuinty always professes to fight for bla...bla...bla..... but he only professes to fight.

They're all just limp limbs - all connected to the same rotten vine - they all profess so much....wisdom eh!

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