944: The Looming Pension Crisis: What You Need to Know

Brian Nichols  0:04  
All right. And on to today's episode. We have a fun one in store, and it's talking about all things, uh, federal bureaucrats, but not just what we're seeing here happen in America with, uh, with Doge, but also elsewhere. And how about we go to our neighbors to the north, we're going to talk about raising the age of eligibility for pensions, specifically up there in Canada, joining me today is young voices contributor, William Dunston. William, welcome to Brian Nichols show. How you doing

Unknown Speaker  0:31  
great to be here. Thanks for inviting me on the show.

Brian Nichols  0:35  
Absolutely looking forward to this conversation. But before we jump into all things pension eligibility, William, which I know the audience is they're at the edge of their seats. Let's do the audience a favor. First introduce yourself here to the audience. And why is this an area that you're so focused and passionate

Speaker 1  0:50  
about? Yeah, so I'll introduce myself. I'm currently a Master of Public Policy student at the University of Calgary in Canada. Before that, I spent a couple of years working in the think tank industry in Canada working on topics including economic growth, rural development and demographics, and that's that's some of that work is what piqued my interest in the age of pension eligibility in Canada, and the broader question of, how do we adopt to have an A Asian population? That's something you're seeing in Canada, in the US and in a lot of other Western countries. It's a topic that is big implication for our economy, for our public finances and for our social services. So I just didn't get the a very important topic,

Brian Nichols  1:31  
yeah, well, and you look over you mentioned the other countries, right? I know right now, one of the main areas out in the was it the eastern Pacific, right? You got Japan, you got China. They are aging populations. And also, I mean, you look at China, for example, they instituted a very draconian policy for decades, the one child policy, which now they're really paying for this in a negative standpoint, as the aging population continues to age, because life happens, and all of a sudden there isn't a group of new new new citizens to fill that void as the older population ages out. So we're seeing this in those other countries, but let's go right here in the North American continent, right? So United States of America, we're seeing this conversation take place specifically with Doge and other areas as well. But up in Canada, this has been another conversation taking place. You know, Justin Trudeau. He's everybody's favorite up there, kidding. And you've seen a very much a return back to, dare I say, some common sense practices in Canada when you're looking at both the way you deal with these different, you know, these different question marks in terms of pensions and eligibility. So just kind of set the stage for us. What does it look like in Canada? Why is this a big deal in Canada specifically? And kind of where do you think this is going to start heading as we go towards raising this eligibility?

Speaker 1  2:48  
Yeah, so we'll start off by just giving an overview of what our public pension programs are in Canada, because it's similar to the United States, but done a little differently. So we have two main programs. The first is called Old Age Security, which is funded entirely through tax payment into general revenue, and that paid out to all Canadians. It starts getting caught off at a certain income level, but that income level is quite high. Then you have the Canada Pension Plan, which is funded through contributions by individuals to the program. However, those contributions are mandatory, so it's a payroll tax, but the amount you pay in is, I just contribution to eventually get and right now, for both of them, the standard age of eligibility to start getting those benefits to 65 you can do a little bit of playing around with the exact year to start, like if it started 62 or start at 67 and get a little more benefits or a little less, but the basic idea is that 65 you start getting those benefits and well, what's happened is that was set up in around the 1960s but as we were just talking about, in a lot of countries across the world, you've had significant demographic change with them. I know you were mentioning the example of China, where they have an Asian population and not enough people coming in to replace the population that's getting older. That's what we're seeing in Canada, in the US, not to nearly as much of an extreme, because we didn't have that draconian one child policy, but we are seeing that where we have more and more seniors compared to a smaller working age population. So and that's particularly why this reform is important. So in Canada, when these programs were set up, people at the age of 55 were expected to live for about another 15 years, and they were about 10% of the population. Now they're expected to live for 20 years at 65 and they're about 20% of the population. So what that means is these programs are being asked to pay for people retirement for a lot longer and for a much larger share of the population at once, and that's just simply not something that's sustainable, and that's starting to become a huge burden on federal public finances here in Canada.

Brian Nichols  4:57  
So what's the alternative, William, I know you're. Talking about raising the age of eligibility. But I mean, my libertarian ethic kicks in here, and I start to ask the question, Is this even an area that government should have its its hands in like this? Just seems like this would be much better solved if it was actually through a true free market, private type of solution.

Speaker 1  5:16  
Well, that's been I think that could certainly be a viable option. You would likely want to keep it within the Old Age Security. There is something called the guaranteed income supplement, as intended for like low income individuals in very severe needs when they're elderly. I think that would be beneficial to keep I would personally be open to doing away with OAS and the CP. I just do not think that's politically viable in Canada. I think if you're looking at the reforms that actually have a chance of happening, and it's raising the retirement age, and that's where you've seen a lot of Western countries. I know in the US, you've increased the age of eligibility for Social Security in recent years, and there's now a debate about whether it needs to be higher. In the UK, they've increased the age of eligibility. I think some of the Nordic countries are going up to 70 with the age of eligibility for the retirement benefits. So Canada is really lagging behind right now, when we're stuck at 65 and I think, you know, it could be beneficial to get rid of these programs and have it done privately, but I think in terms of politically feasible reforms, it's going to be raised in the age of eligibility.

Brian Nichols  6:18  
So I'm a sales guy by trade, William, and one of the things we talk about in the world of sales is when you get towards the finish line, you start talking about price points. Usually, this is where negotiation starts, right? So what if, and here's my my dream scenario, right? We go in with the libertarian ethic. We're gonna go ahead and privatize this thing. And then the other side of the aisle they say, No, no, don't privatize this thing. Just raise the age of eligibility. Would there be a middle ground from a negotiation standpoint? William to say, Okay, how about this? We'll get the best of both worlds. We'll keep the age of eligibility as is. However you get to opt out if you want to go towards a private solution, you can. You're not forced on this public option. And if you want to stick in the public option to the worst case scenarios that you've outlined, you know that the folks who are not doing so well financially, or they have other extra issues, or what's the term, pre existing conditions, or whatever it may be, that sure you can jump on the public option, but if I don't want to jump on I don't have to pay for it, I'm not going to see the benefits. What say

Speaker 1  7:16  
you Yeah, I think that would certainly be a good option. I certainly like the idea of giving people that option to like, just like, like you were saying, the idea of privatizing, letting people plan for their own retirement, you know, make their plans based on their own preferences to spend now or spend when they're older, let them make their own investment choices. But, like we're saying, there can be benefits to having that optional, public option, so that people who, for whatever reason, struggle to invest privately, can access a government program that can still, you know, help them meet their their retirement goals. I think that could very well be a solution. I still think that's likely to be politically challenging. I really don't think there's political appetite, at least in Canada, for doing away with the the mandatory public program, unfortunately, but yeah, I think that's certainly a feasible middle ground, just from a from a policy perspective, if not politically.

Brian Nichols  8:08  
Well, let's talk about this, because this seems to be a recurring theme here that you're bringing up is that it doesn't seem politically viable in Canada. What is that? Why is it that the neighbors to the north here are allergic to liberty and freedom.

Speaker 1  8:22  
Well, I'm, I'd say we're not that much more allergic than the United States. I think you have similar challenges when you're having those debates about reform and entitlement programs in the state. But yeah, I think it's what you're seeing in Canada, is what you see in any country. When people bring in a public program, it provides, it does provide a certain sense of security. So even if people would be better off having a private program and being able to make those choices themselves, some segments of the population is just really attached to that security of having a government provided program. So that makes it politically strong difficult to do away with, right? It's what you always see whenever a politician suggesting cutting a program, even if, on balance, it's a good idea, you'll have their opposition trot out, you know, the worst case scenarios, and all the you know, the you know, all the you know, all the pictures of like the people who will be worse off from this and the most extreme example possible to get public sympathy. So it's a challenge on that tonight?

Brian Nichols  9:22  
Well, it's definitely a challenge, right? And I get that, um, it gets I guess, you know, I look at where we are right now in America, and we are seeing, like the ultimate reversal of policy that we've probably seen in decades, right? With with Donald Trump going into office, Elon Musk jumping in with Doge, and now we're peeling back the curtain. We're exposing the sunlight to the cockroaches, and they're just they're scrambling right? And while there is very much a real reaction from I would say more of the I don't want to call them the left, because, I mean, yes, the left, obviously, is freaking out, but I would say more of. Status quotarians, if that's a term, the folks who just were like, well, this is how things have always been. Why are we changing this? Because probably they're getting benefits from the gravy train. But I digress, but we're seeing that there is, from a public perspective, very much an appetite. For the first time, I forget the specific metric, but for the first time in I think it was like over a decade, Americans have a more positive vision for the future of America. They're feeling more positive about our prospects. So the fact that this optimism also has swept through the American public, after years of people saying things are getting worse and worse and worse. I mean, that's one data point. But then on the other side, Donald Trump, even though he's going through and like a Javier Malay with his chainsaw. By the way, gotta give a special shout out to my good buddy, Dorian for my little Javier Malay Christmas present. And you can see this on the screen here. But he's got his chainsaw right, and he's cutting down these these different federal bureaucracies, and with that, the benefits therein that come from those bureaucracies, but He's maintaining very much a positive approval rating in the mid 50 percentile range, when, just for context, folks, Joe Biden couldn't get above like, I think was 44% for over three years of his administration. So it does speak to, I think, where at least the American public, William, they're starting to have a little bit of change of heart. And let's just segue back up to our neighbors to the north, there in Canada, I don't know, Justin Trudeau, seems like he's been definitely getting a lot of slings and arrows and rightfully deserved from the Canadian public. And that probably goes back to with the the whole trucker protest in Ottawa. You know, fast forward to today. You got the the conservative gent there. I forget his name on the the right. Who's he's standing up fighting back against Trudeau, it seems like he might be the next prime minister. Help me out there, by the way, when I turn it over to you what his name is, I can't remember, but it does seem that maybe there is an opportunity right now for Canada to kind of follow in the footsteps of America.

Speaker 1  11:54  
Yeah, so the conservative fellows name is Pierre poilievre, who's likely going to win the next election. And it's interesting when you talk about all the optimism in the United States, because I find it's really kind of the reverse. In Canada, there's a lot of of negativity, a sense that Canada's on the decline, a lot of pessimism. And it's not, I think it's people are a bit overreacting to recent circumstances. But it's not totally ill informed, we have had a stagnant economy over the past 10 years, just not grown very well. Under the Trudeau Liberal government. We've had rising crime. We're seeing growing geopolitical tensions, no with the Trump administration, with the potential of the trade war, that's a very that's potentially a very negative impact on the Canadian economy, with how much of our international trade is tied up in the United States. So there's a lot of pessimism there. And I think that may also be that's and that's an interesting thing, because I could see it going either way when we're talking about making those bold, Liberty minded, small government reforms. Because on one hand, when you have that pessimism and people feel more insecure, you can have people more more wanting protection from the government, right? It can be hard to sell people on. We're going to reduce a government program that protects you or benefits you when you feel insecure about your future at the same time, I think there's, there could also be a potential, though, for more of those, those bold reforms, right? I think we often see is it's during those periods of economic stagnation, during those periods of difficulty, that people are actually willing to have those difficult discussions about what what the government should look like, what's realistic for the government to be provided. So I think when we're going into an environment where there's no just a lot of stress on Canada's economy, on its public finances, I think you could very well see more Canadians open, having a real debate and being open to bold reforms on things like our retirements, our public our public pension system, with poly advocates. It's interesting because he has been campaign, campaigning very much on an idea of small government, cutting spending, cutting taxes, but what I found interesting has been very he hasn't provided a lot of specific details on what he's going to do. I think part of that is just on the strategy side. You don't want to go out and say, I'm going to cut this program, because then the other party can attack you on it. But I'm, I guess I'm really interested to see what appear polyev LED Conservative government actually does in Canada. What happened the last time we had a Conservative government which polyev was a cabinet minister under former Prime Minister Stephen Harper? Is they made some reforms, but they were quite incremental. So I'm in I expect that polyev will be a bit more bold than the previous Conservative government, but I'm, I'm very curious to see what direction he ultimately goes in. And I'm, I can't say I can fully predict the future about what's going to happen. I think we're going into an environment where it will be more politically feasible than than it has been recently to do things like reform our retirement income systems and cup. Of extending, but I'm not, I'm not sure if we'll go quite as far as you're seeing in the United States.

Brian Nichols  15:06  
Or William, you just you become our 51st state, and we call it a day. No, I'm just teasing. So, so William, that's, that's the the groundwork, right? Of where you guys are. Let's talk about what you think is going to be the most realistic outcomes here, right? I mean, I guess the answer is going to be, we're going to raise the age of eligibility. But I mean, beyond that, do you see that this conversation might turn into something more in Canada? And if so, what direction do you think Canadians are going

Speaker 1  15:37  
to go? So what do you mean a bit by what by turning into something more.

Brian Nichols  15:42  
Yeah, so, so the the ethic, right? This, this, I'll call it the doge ethic, ethic here in America, where, your average person, they start to see, you know, they again, peel back that layer of the onion, and they say, Oh, wow, there's a lot here we got to unpack, right? So do you feel that once you start to make those incremental steps, as you mentioned, but in this case, it kind of is a big step for Canada now raising the age of eligibility, if we do go that path, will that kind of, is that the stepping stone? Or is that the proverbial, you know, the first domino to knock down, the other dominoes to start maybe opening up more substantive changes that are much more in line with the doge ethic, or is there just something about the Canadian populace that they are very much adverse to disrupting the Canadian status quo?

Speaker 1  16:30  
Yeah, so I'll say, I'll say two things on that, and thanks for clarifying that. So respond your question about the Canadian populace. I think there is a little bit of a difference. So I do think Canadians are are one more averse to things in the status quo, and I think they're just two a bit more attack to their to their publicly provided programs. And part of that is that think about the end of World War Two, the Canadian government, and primarily Canadian politicians from the Liberal Party, have really struggled to create a national identity for Canada that's separate from the United States. So a lot of our patriotism that exists in Canada really emphasizes how we're not Americans. And one of the things that you know the Canadian elite settled on was, well, we have more generous social programs, we have a universal health care system. We have all these benefits provided by the government. So I think you have a lot of Canadians who unfortunately, have quite a bit of an emotional attachment, and they have a patriotic attachment some of those government programs. But getting back to your question, I do think we're entering an environment where there's more opportunities make reform. I was talking about retirement income programs a lot, but there's other areas where we will vary, where I think it's very possible we'll start to see reform in healthcare. So for example, as you probably know, Canada has a single payer healthcare system that has not worked terribly well. There's a lot of inefficiencies in the program, and it's delivering poor results. I don't think we'd ever move to like a primarily private system, like you have in the United States, but there are other countries in the world that have different versions of universal health care. You have Germany, the Netherlands, Singapore, Switzerland, and all of them. There's some private element within the system where there's some level of competition in market based mechanisms. So you have that everyone's health care is provided for. Do you still gets to some of those market elements. So you get a more efficient system. In Canada, it's become, it's very like, politically taboo to suggest any move away from single payer health care, even if it's like keeping universal benefits but just adding some market mechanisms to it. I think, as we're seeing this greater economic stagnation, these greater economic challenges, and like I was saying earlier, that willingness to have difficult conversations, I think we will see Canada. We'll see Canadian government more willing to make changes on health care, for example, to be able to bring in those modest reforms to get them more in a market based direction. I don't really see Canada going in a full, you know, heavier Malay or what Doge is potentially becoming in the United States. I just, I think, unfortunately, that's not the political environment in Canada, but there's definitely going to be, over the next few years, a real impetus and opportunity for reform minded, small government minded politicians in Canada to to make important changes that are overdue.

Brian Nichols  19:23  
So I'm gonna give my final thoughts before I turn things over to you to bring us home here, William, and I'm gonna use an analogy. Analogy, metaphor. It's one of the two, whatever. One is not the same as like, as like or as or is that? Simile doesn't matter. Anyways, for today's conversation, I'm going to make a comparison. There we go, and the comparison is going to be and don't take this the wrong way. I'm viewing Canada kind of as the morbidly obese guy who's like 400 plus pounds, and they're arguing with the nutritionist, saying, I don't need to cut back on my sweets and sugar like I cut back on eating eating the potato chips I'm already. Doing the right things. And as the nutritionist, I say yeah, and you're still 400 pounds. Now I can say this confidently, as a guy, used to weigh 385 pounds when I lost over 180 pounds. So I saw that for me to lose weight, it took some really big changes, right? I had to start eating right across the board. I had to start getting off my butt and going outside, walking, working out, moving, just doing stuff, right? And it took two years of hard work, of sacrifice, and actually, you know, in order to obtain a positive outcome for yours truly. And I'm looking at Canada as kind of like they're pushing back, you know, I used to work in the fitness industry for a while, and I would see this all time, and have a very, you know, very unhealthy, morbidly obese person come into the gym, and they're like, yeah, maybe we'll talk about making some changes. And then I'm like, Okay, well, here's what we're gonna do, here's your plan. And they're like, No, I'm gonna do that. I'll start with doing one thing. Are the 30 things I should do. And I'm like, that's fine. I mean, yes, you're going to be healthier air quotes by cutting out the chips, right? But if you're still drinking all your calories with with sugary soda or eating candy or things with zero nutritional value, sorry, you're not going to get healthier. So I guess I make a sales pitch to the Canadian public, please don't be a morbidly obese 400 plus pound guy, because things aren't going to get better if you're only doing these little incremental changes. And hey, start looking at different options. Start considering that maybe there, there is going to be, need to be some sacrifice. We're feeling that right now in America, right like folks are starting to freak out because, oh no, I'm a federal worker, and I lost my guaranteed pension and my guaranteed job. Sorry, your average person, that's called real life. And there is this very big disconnect between what the average person in the private sector has to deal with here in America, versus the very cushy, very insulated from real life market forces jobs in the federal bureaucracies and therein so and then you extrapolate that down to what you're talking about in Canada, with all these different benefits, all these different, you know, these little atta boys. And call them bribes, call them what you will. But there is very much a real, a real, I think, a hill that both the Canadian public but also like the Canadian politicians, have to get over if you want to make things better. Otherwise, William, I'm just saying maybe Canada as our 51st state might be a better idea. That's my final thoughts. What do you have for us on our end as you bring us home today?

Speaker 1  22:31  
Yeah, so I'll say a couple things. I'm not a fan of the 51st guy the idea, but I am a fan of poster economic ties of the United States. Let's get rid of the remaining protections that we have on cross border industries. Let's get a general labor movement agreement in place. I think that'd be great. The other thing I'll say is, I think, I think one silver lining of the difficulties that can just happen right now, our economic challenges, our potential trade war, our burden, in our growing burden, some debt is, I think if you use the analysis of Canada that, that morbidly obese person, I think what could very well happen is the next few years we're gonna, we're gonna be forced to make those changes, whether we like them or not, right? Like, it's gonna be a hard sell politically, Canadians to do it. But if we see a trade war where GDP drop by, you know, several percentage points. We keep having statement productivity. We keep having burdensome death. At some point, governments are going to have to start cutting back those benefits, whether people like it or not. So, going back to my earlier point, I think these challenging times in Canada could end up having a positive benefit in the long run, by making Canadians make those difficult decisions about how much government they can really afford to have, and the answer is less than what we currently have.

Brian Nichols  23:49  
William Dunson has been a great conversation about raising the age of eligibility for Canadian pensions, and across the board, we had some really cool conversations about just like, incentive structures, public policy and the likes, which, Hey, William, it's great having you on the show as a young voices contributor. I know young voices, they do amazing work getting folks like you to the table and having these conversations. So shout out to young voices, William, where can folks go ahead and reach out to you if they want to continue this conversation, learn some more about public policy, or convince you that Canada should be, in fact, our 51st state?

Speaker 1  24:18  
Yeah. I mean, people can definitely reach on to me on Twitter or access it's now known, I guess, that that's my main platform for talking about public policy, Canadian and American. So definitely happy to continue the conversation with anyone in the audience.

Brian Nichols  24:34  
Perfect. All right. William Dunston from young voices, really appreciate you joining us here on the show today. And with that, folks, we're gonna go ahead. If you have any questions, comments, concerns, or you wanna continue the conversation, head down below into the comments. Let us know your thoughts. Do you think that Canada needs to take a big, hard right turn? If so, let us know your thoughts. Or if we think Canada is on the right path where they've been doing the public options. Let us know. And definitely have some fun down there in the comments. And you can follow yours truly at B Nichols liberty, Twitter, Facebook, YouTube, Rumble, wherever it is. You consume your your podcasting platforms, your video platforms. You can find The Brian Nichols Show. Just hit that subscribe button, hit that little notification bell to single time we have a brand new episode, go live with that being said. Brian Nichols, signing off. You're on The Brian Nichols Show for William Dunson, we'll see you next time bye.

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