Liberals robbing CPP fund

There are some who believe the government's role in society should be limited to absolute necessities such as national defense and serving as the resource of last resort for citizens who cannot be helped by other citizens, private organizations or charities that donate money and time.

Others believe that the state should be involved in every aspect of society and look after its citizens like an indulgent parent.

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The ideal role for government would seem to be somewhere between those two extremes.

The current Liberal government in Ottawa leans toward the sugar daddy method of governance and has ramped up spending and borrowing accordingly since taking office, all the while knowing that there is a looming shortfall of funds for a great deal of very necessary infrastructure projects.

Ottawa is living well beyond its means so where to source the money?

Could they borrow even more?

They're already taking heat for increased deficit spending, they'd prefer to avoid more criticism on that front. Raise more money through more taxes?

That would hurt the economy and be a very unpopular move, and they place great store in being popular.

No, it needs to be something else, and the Liberals have found another source for money - Canada Pension Plan funds.

They will invest the CPP in infrastructure projects while at the same time, increasing CPP contributions from both employee and employer thus providing even more money to dip into.

This notion reveals the mindset of those who have spent far too long in government service, seemingly confusing the definition of investment defined as government spending, with investment as practiced by citizens and corporations for profit.

Politicians love to describe their spending as "investments," no doubt because it has a positive connotation and it's true that when government invests in roads and bridges, in hospitals and education, the country does get a return on investment in that these things are beneficial to society and to the economy in general.

Retirement savings require a totally different kind of investment, one where return on investment means an increased dollar value in the accounts of the investor.

That requires investing in profitable ventures, and infrastructure most certainly is not profitable - it consistently loses money (for example the Port Mann Toll Bridge is forecast to lose $70 million this year). Nobody investing their own money would ever consider infrastructure a suitable avenue for monetary increase.

We hear frequently in the news that Canadians aren't saving enough for their retirement. More than half don't have a private pension plan and must use their own initiative to put money aside using RRSPs and the like.

For those who fail to do so and also for those whose retirement plans have gone sour, meager government pensions will be practically all they have to live out their golden years. It is absolutely essential that the government properly takes care of the money they require the citizens to contribute to that plan.

What happens if, a decade or two hence, it turns out the government has blown all their CPP funds on money-losing infrastructure projects?

Where will the government get the money it is obligated to pay its retired citizens?

Will they try to pay the pensions out of general revenues or perhaps borrow even more money to replace the drained CPP funds?

It's a recipe for disaster.

Infrastructure is a proper use of government funds that should come from general revenues.

It should be a high priority item in the budget but it seems almost to be an afterthought, not nearly as appealing to the government as spending that puts money directly into the pockets of voters.

Rather than raid the nation's public pension funds, the government should start spending responsibly, balance the budget and pay down the debt.

The problem as the Liberals see it, is how to do that without curbing spending and thereby annoying voters who benefit from excessive government largess.

-- Art Betke

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