Dodge's retirement reality check

More dire warnings about Canada's future at the Liberal-organized Canada 150 thinkers conference in Montreal.

David Dodge, former governor of the Bank of Canada, in his words "set the table" for today's discussion about families by laying down plenty of chipped glass and dull knives.

Like everyone at this gathering, Dodge says Canada's declining productivity is setting us up for a grim future. Without improved productivity, he says Canadians' standard of living will be in decline, they'll have to work longer hours and work beyond the traditional age of retirement. He says that will directly impact how people will be able to care for their children, aging parents and people with disabilities.

Dodge notes that, in the past, families have often relied on daughters or mothers to do much of the caregiving but points out that cannot continue when they will have to work longer and harder just to make ends meet and save for their own eventual retirements once they're in their late 60s or even after the age of 70.

Dodge says someone making $42,000 a year needs to save at least 11 per cent of his or her income every year in order to retire comfortably at the age of 65. Someone making $95,000 must save 17 to 22 per cent to retire at 65 or 63 respectively.

And a dose of reality from Ken Georgetti, president of the Canadian Labour Congress: only one quarter of Canadians contributed to an RRSP in 2008.

Dodge also addressed health care. Several other speakers have said politicians are going to have to open up an uncomfortable debate over how to sustain the bloated system that will soon be overburdened with baby boomers requiring services Canada cannot afford.

Dodge put forth four possible solutions: create a health-care tax to raise revenues, reduce services provided for free and have people or employers buy private insurance for the rest, introduce a co-pay system or reduce levels of service (translating as long wait times, etc.) and allow a two-tier system.

Dodge admits these are "stark and unpalatable" choices but says there is no magic solution and it's time for an "adult debate" in Canada on what citizens want from our health-care system and what they want to pay for it.